Mumbai: The debt-waiver scheme of nearly Rs72,000 crore for farmers and additional subsidies on petroleum and fertilizers, besides higher interest rates on government paper, are likely to push up Centre’s expenditures, a report by the Centre for Monitoring Indian Economy said.
Firming up of interest rates on government debt paper, outgo on account of the Sixth Pay Commission’s recommendations and farmers’ debt relief package besides additional subsidies on petroleum and fertilizer products are likely factors that could push up the expenditure, the report said.
For 2008-09, total expenditure is budgeted at Rs7,50,884 crore, an increase of 5.2% over the actual planned expenditure in 2007-08.
The total Government expenditure, including that on debt-relief package and outgo due to the Sixth Pay Commission’s recommendations for 2008-09 stands at Rs7,81,448 crore, the CMIE report said.
The central government had in Budget 2008 announced a debt-relief package of Rs60,000 crore for small and marginal farmers which was later increased to Rs71,680 crore.
“Additional subsidies for fertilizers and petroleum products add up to Rs1,30,000 crore. This amount and the impact of the Sixth Pay Commission and debt relief package may push up the total expenditure to Rs9,11,448 crore during 2008-09,” the report said.
Interest payment, which is the largest expenditure ahead of the central government, accounted for 25% of total expenditure during April and May, CMIE said.
At Rs 27,229 crore, it was up by 3.8% over the payments made in the corresponding months of 2007, the report said.