Govt rejigs accounts to spend Rs 25,725 cr

To dole out Rs 3,000 cr to fertiliser companies; Rs 800 cr to AI

The government today sought Parliament’s approval for additional spending of Rs 25,725 crore on fertiliser subsidies, food and for equity infusion in ailing state-run carrier Air India (AI), among other heads in the current financial year.

The government has decided to give a Rs 3,000-crore cash subsidy to fertiliser companies and put in another Rs 800 crore in AI. Oil marketing companies, though, are unlikely to get any subsidy for the losses they incur on selling cooking fuel at subsidised rates in the current year.

Infrastructure companies may get some more business, as the government will put in Rs 1,000 crore for the Commonwealth Games to be held in New Delhi next year and another Rs 1,200 crore in drought and flood relief programmes to be carried out in other parts of the country.

“The government spending for the full year will continue to be Rs 1,02,083 crore this year, since we have cut allocation for programmes and departments where the pace of expenditure has been slow. We want to do away with the practice of the ministries spending money at the end of the year,” said a senior finance ministry official.

The gap between government earnings and expenditure is expected to remain at the budgetary estimate of 6.8 per cent of the gross domestic product.

Finance Minister Pranab Mukherjee today placed the proposals in the Lok Sabha as part of the supplementary to the Budget. Unlike last year, when government spending rose 20 per cent in the two supplementaries as a result of stimulus measures and implementation of the Sixth Pay Commission report, the expenditure is not going to shoot up this year. Another window for additional spending would be open only at the time of the next Budget, when the expenditure estimates for 2009-10 would be revised.

A major chunk of the Rs 25,725-crore spending will go into the unplanned expenditure like payment of pensions and superannuation benefits to defence personnel and other central government employees.

With the implementation of the Sixth Pay Commission recommendation on pensions, the outgo on this account is Rs 6,743 crore. Food subsidy on account of higher minimum support price and payment to state governments for decentralised procurement of food grain has also gone up by Rs 3,458 crore.