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Wednesday, February 1, 2023

Govt. seeks ₹3.26 lakh crore in supplementary demand for grants

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The government on Friday sought an additional ₹3 lakh-plus crore as supplementary demands for grants for 2022-23, primarily to fund a higher subsidy bill on items such as fertilizers, food and LPG, with about 10% of the sum to further ramp up capital expenditure in sectors like roads and railways this year.

While the Finance Ministry has put up for Parliament’s approval an additional gross expenditure plan worth almost  ₹4.36 lakh crore, the net cash outgo is pegged at ₹3.26 lakh crore, with higher receipts and savings from existing outlays adding up to ₹1.1 lakh crore.

The major spending heads include ₹1.09 lakh crore for fertilizer and urea subsidies, more than ₹80,000 crore for the Department of Food and Public Distribution, three-fourth of which is earmarked for the Pradhan Mantri Garib Kalyan Anna Yojana, and ₹22,000 crore to be paid to oil marketing companies for losses on LPG cylinder sales. For the national rural employment guarantee scheme, an additional outlay of ₹16,400 crore has been sought.

“With tax revenues expected to be higher than the Budget number, we estimate the Centre’s fiscal deficit to exceed the budget target (6.4% of GDP) by around ₹80,000 crore to ₹1 lakh crore,” said CARE Ratings chief economist Rajani Sinha.

“With savings likely under other heads, we do not see the supplementary demands resulting in a meaningful breach of the fiscal deficit target,” reckoned ICRA chief economist Aditi Nayar.

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