Comparing Development Plans with Expenditure Data

For the next step, I compared the estimated costs of development plans with Adilabad with the actual amount paid according to expenditure vouchers. Data about expenditure vouchers was collected from: https://egramswaraj.gov.in/FileRedirect.jsp?FD=ExpenditureReport2023-2024&name=StateExpenditureReport.html.

Looking at Adilabad GPDPs from year 2020-23

The total number of planned activities from 2020-21 to 2022-23 remained constant at around 10,000. However, in 2023-24, they suddenly increased to 45,409. This is despite the estimated cost also staying roughly constant across all of the years at around $1-1.2 billion. 

By looking at the distribution of estimated costs in Adilabad, we see that 74.3% of plans have an estimated cost under 1000 and 69.7% have an estimated cost under 100 rupees. 100 rupees is clearly insufficient to carry out even the most basic projects, let alone ones that require large investment such as road construction. This indicates the sudden rise in the number of plans with negligible cost that GPs don’t intend on completing. One possible reason for this is that GPs are able to be in consideration of “National Panchayat Awards” that give them additional funding if they have a large number of planned activities. Additionally, having many planned activities can be a way to avoid scrutiny. However, if the vast majority of these plans are not implemented, it is not helpful to just increase the number of plans.

How many activities were completed?

In order to compare expenditure data with GPDPs, all expenditure vouchers from the Egramswaraj portal were collected. Each expenditure voucher had a unique “activity code” that identified which activity it corresponded to. By merging GPDPs with the expenditure vouchers on the basis of the unique “activity code,” the completed activities and their corresponding costs could be identified.

First, getting a general sense of the distribution of the amount paid:

• Mean: Rs. 85,076
• Median: Rs. 51,000
• Minimum: Rs. 200
• Maximum: Rs. 2,035,627

Looking at the actual amount paid, we see that in total, 610 million Rs. (61 crore) were spent by GPs in Adilabad, with each GP spending an average of 1,303,784 Rs (13 lakh). However, estimated costs each year were twice that number, with the estimated cost of all activities in 2023 being 1.22 billion Rs (122 crore). This indicates that GPs spend only about half the funds they request. A brief inspection of the receipts from the Egramswaraj website suggests that given that receipts are roughly equal to payments, this drop in amount spent compared to estimated costs is likely caused by (a) receiving insufficient funds and (b) the amount paid for a certain activity being lower than the estimated cost.

In FY 2023, voucher payments for a total of 5363 activities were completed. These activities came from several years, with 788 activities from 2020, 796 from 2021, 1766 from 2022 and 1304 from 2023. This shows that the total number of activities on which there has been spending is far less than the total number of planned activities. As a brief note, expenditure data must also be verified from the field to ensure that activities on which money is spent are actually being implemented.

Comparing Estimated and Actual Cost

Estimated cost and amount paid were closely correlated (correlation of 0.82). This means that the higher the estimated cost, the higher the amount paid. However, in absolute terms, the amount paid (median Rs 51,000) was around 31% smaller than estimated cost (median Rs 93,760).

Finally, to compare the sector-wise distribution of estimated cost and amount paid:

Compared to estimated costs, we see that in Adilabad, a significantly higher proportion of funds was spent on sanitation and drinking water, while a significantly lower proportion was spent on administrative support and rural electrification. This could perhaps be because sanitation and drinking water projects are more likely to be completed than rural electrification projects because they’re simpler.

Comparing the sources of amount paid and estimated cost:

We see that a significantly higher proportion of funds came from the 15th (central) finance commission compared to the state finance commission and own funds. This may indicate that state funds and own funds were much lower than what was estimated.

Further analysis (coming soon!):

• What is the average cost required to construct a road, build a new toilet, or install a new public water tap? A closer inspection of expenditure data can reveal how efficient GPs are at constructing projects with less cost, and how much funding is actually required in practice for a particular development project.
• What about receipt data? Is the total amount of money received through receipts roughly the same as money spent? What are the sources of the receipts?
• Finally, how does Adilabad compare to other districts within and outside Telangana? Do we see similar trends in all districts?