Govt seeks nod for additional spend of Rs 57,000 cr

In the wake of the mounting subsidy burden, the finance ministry on Friday sought Parliament's nod to spend an additional Rs 56,848 crore in 2011-12, which may further widen 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 tabled 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, which have been bleeding because of selling fuel at a price lower than that prevailing in the international market.

The second additional expenditure is towards fertilser subsidies of Rs 13,778 crore. The government has sought an additional amount of Rs 2,297 crore towards food subsidy.

While the gross additional spend is Rs 63,180 crore, the government plans 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 aside subsides from fuel, food and fertiliser, which comprised about 73 per cent of the gross additional expenditure, the ministry has tried to limit the demand only to a few necessary items.