NEW DELHI: The government on Friday sought Parliament's permission for an additional expenditure of Rs 63,180 crore, involving a cash outgo of Rs 56,848 crore, on account of a mounting subsidy bill.
More than half the additional outgo will be directed to oil marketing companies which have been forced by the government to sell diesel and cooking gas below the prevailing price in the international market. Almost Rs 14,000 crore has been earmarked for higher fertilizer subsidy, while close to Rs 2,300 crore is proposed to be handed over to meet the higher-than-budgeted food subsidy bill.
The remaining Rs 6,331 crore would be met by way of savings by various ministries and departments, the government said in the Lok Sabha.
The second supplementary demand for grants is in addition to the Rs 9,016 crore cash outgo approved by Parliament during the last session. In the first supplementary, finance minister Pranab Mukherjee had sought parliamentary approval for additional spend of Rs 34,725 crore although the cash outgo was much smaller.
So, between the first two supplementaries, the government has already overshot its budgeted expenditure by almost Rs 66,000 crore, which is over 5% higher than the Rs 12.58 lakh crore that the government had budgeted to spend during the current financial year. With two more similar demands expected, the amount is set to go up further and put pressure on the already-strained financial position of the government.
Mukherjee has already indicated that the government could end up missing the fiscal deficit target of 4.6% of GDP that he had hoped to achieve when he presented the budget in February. Although he and his officials refused to acknowledge it, most analysts had pointed out that the government did not accurately capture the subsidy bill to show better financial numbers.
Apart from subsidies, there are several other additional expenditure that Mukherjee has to factor in over the remaining four months of the financial year. For instance, the government is under pressure to infuse fresh equity in public sector banks to ensure that they have sufficient capital to meet their growth requirements, while the Centre continues to hold over 51% stake. In fact, financial services secretary D K Mittal has already said the government may have to pump in close to Rs 20,000 crore in state-run banks during the current financial year.
With small savings collections remaining slow and tax revenue slowing down, the government was forced to increase its market borrowings by over Rs 50,000 crore. And, with disinvestment proving to be a non-starter, Mukherjee's fiscal headache is here to stay.
More than half the additional outgo will be directed to oil marketing companies which have been forced by the government to sell diesel and cooking gas below the prevailing price in the international market. Almost Rs 14,000 crore has been earmarked for higher fertilizer subsidy, while close to Rs 2,300 crore is proposed to be handed over to meet the higher-than-budgeted food subsidy bill.
The remaining Rs 6,331 crore would be met by way of savings by various ministries and departments, the government said in the Lok Sabha.
The second supplementary demand for grants is in addition to the Rs 9,016 crore cash outgo approved by Parliament during the last session. In the first supplementary, finance minister Pranab Mukherjee had sought parliamentary approval for additional spend of Rs 34,725 crore although the cash outgo was much smaller.
So, between the first two supplementaries, the government has already overshot its budgeted expenditure by almost Rs 66,000 crore, which is over 5% higher than the Rs 12.58 lakh crore that the government had budgeted to spend during the current financial year. With two more similar demands expected, the amount is set to go up further and put pressure on the already-strained financial position of the government.
Mukherjee has already indicated that the government could end up missing the fiscal deficit target of 4.6% of GDP that he had hoped to achieve when he presented the budget in February. Although he and his officials refused to acknowledge it, most analysts had pointed out that the government did not accurately capture the subsidy bill to show better financial numbers.
Apart from subsidies, there are several other additional expenditure that Mukherjee has to factor in over the remaining four months of the financial year. For instance, the government is under pressure to infuse fresh equity in public sector banks to ensure that they have sufficient capital to meet their growth requirements, while the Centre continues to hold over 51% stake. In fact, financial services secretary D K Mittal has already said the government may have to pump in close to Rs 20,000 crore in state-run banks during the current financial year.
With small savings collections remaining slow and tax revenue slowing down, the government was forced to increase its market borrowings by over Rs 50,000 crore. And, with disinvestment proving to be a non-starter, Mukherjee's fiscal headache is here to stay.
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