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Govt seeks nod for additional spend of Rs 56,848 crore

28 Nov 2011 Evaluate

In the wake of the rising subsidy burden, Finance Minister Pranab Mukherjee has raised an additional expenditure demand of over Rs 56,848 crore in the Parliament in 2011-12, which is likely to further enlarge the government's fiscal deficit. This would be in addition to the budgeted expenditure of Rs 12.5 lakh crore and an extra net spend of Rs 9,016 crore approved in the first batch of the supplementary grant.

In the second supplementary demand for grant scheduled in the Lok Sabha, Finance Minister Pranab Mukherjee sought the approval of the House to pay Rs 30,000 crore as compensation for the first half of the year to oil marketing companies (OMCs), which have been suffering due to selling fuel at a price lower than that prevailing in the international market.

Fertilizer companies will get nearly Rs 13,778 crore while nearly Rs 2,297 crore will go towards food subsidy. Though the gross additional spend is Rs 63,180 crore, the government is planning to meet the requirement of Rs 6,330 crore through savings in various heads, leaving the net cash outgo at Rs 56,848 crore.

Leaving away subsides from fuel, food and fertilizer, which comprised about 73% of the gross additional expenditure, the ministry has tried to limit the demand only to a few necessary items. Further the evaluation will be done towards the end of January 2012, when the government will compute its expenditure and savings, to arrive at the revised deficit target.

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