Business News/ News / India/  Govt seeks Parl nod to spend additional 1.48 lakh cr in FY23

The Central Government has sought the approval of Parliament to spend an additional 1.48 lakh crore for the current fiscal year ending this month as part of the second batch of supplementary demands for grants, an official statement said on Monday.

The additional gross expenditure for the same period will be 2.71 lakh crore, the government statement read.

Of the total, an additional fund of 36,325 crore is being sought for payment towards fertiliser subsidy, said the second batch of supplementary demands for grants tabled in the Lok Sabha by Minister of State for Finance Pankaj Chaudhary.

This includes additional subsidy outgo of 21,000 crore for P&K (phosphorus and potassium) and 15,325.36 crore for urea.

Additionally, the government has pegged the fund requirement for additional transfers to the Universal Service Obligation Fund (USOF) at 25,000 crore.

As per the supplementary, there would be an additional outgo of 33,718.49 crore for Defence Pensions, especially on account of payment of arrears towards the One Rank One Pension (OROP) scheme.

The requirement of additional transfer to the GST Compensation Fund towards states and Union Territories have been pegged at 33,506 crore.

"Approval of the Parliament is sought to authorise gross additional expenditure of 2,70,508.89 crore. Of this, the proposals involving net cash outgo aggregate to 1,48,133.23 crore and gross additional expenditure, matched by savings of the Ministries/Departments or by enhanced receipts/recoveries aggregates to 1,22,374.37 crore," said the statement on supplementary demands for grants.

Aditi Nayar, Chief Economist at Icra, said the net cash outgo under the supplementary demand for grants is dominated by fertiliser subsidiary, defence pensions, the telecom sector and GST compensation, which account for 73 per cent of the total amount.

"Although a portion of the net cash outgo of 1.48 lakh crore may be offset by savings under other heads, it has raised the likelihood of a modest slippage relative to the revised estimate of the FY2023 fiscal deficit of 17.6 trillion. Regardless, bond yields are likely to take a cue from global yields and the expectations of monetary tightening at the upcoming policy review," she said.

The government will spend 41.87 lakh crore in 2022-23, according to the Union budget it presented on 1 February.

India will stick to the spending target it specified in the budget and any unused funds will be reallocated, a government official was quoted as saying by Reuters.

The government's fiscal deficit target would be met through savings, extra tax and other receipts, the official said.

The government's fiscal deficit target for the ongoing fiscal, which will end on 31 March, is set at 6.4 per cent of GDP.

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Updated: 13 Mar 2023, 07:13 PM IST
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