ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Losing Struggle Vol VIII No 20 Skylark 284 Frere Road Bombay 400 001 Grams Econweekly Editor Krishna Raj Assistant Editors Rajanl X Desai, jawid Lalq Business Manager A Fernandes-Prabhu Editorial Staff Colln de Souza, Ashok Rao. A A Dalvi THE Economic and Financial Classification of the Central Government Budget, published every year by the Minister of Finance, groups government expenditure, firstly, according to economic categories, such as consumption, savings, capital formation and financial investment, and, secondly, according to the purpose of the expenditure, such as social and economic development, defence and administration. There is, besides, also a cross-classification by both economic and functional categories. From an analytical point of view, the classification suffers from certain serious limitations. Firstly, it covers only the Central government budget and does not include the state budgets and budgets of semi-government bodies, which are substantial beneficiaries of financial devolution from the Centre. Nor is the expenditure of the state governments and semi-government bodies classified in a similar manner anywhere else. Disbursements of the state governments taken together now almost equal those of the Centre. It is unfortunate, therefore, that neither the Finance Ministry nor the Planning Commission nor the Reserve Bank systematically attempts economic-cum-fu notional classification of the state government budgets.

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