Govt seeks Parliament's nod for over Rs 87K crore extra expenditure

It includes Rs 6,593 cr towards fertiliser subsidy scheme, around Rs 9K cr for agriculture, and Rs 8K cr for defence

The Union finance ministry on Thursday sought the approval of Parliament for a gross additional expenditure of around Rs 87,762 crore involving a net cash outgo of Rs 44,123 crore through the first  Supplementary Demands for Grants. 

 

The gross additional spending would be matched by savings of Rs 43,618 crore by ministries and departments or by enhanced receipts and recoveries, and hence not impact the fiscal deficit.

 

“We don't see this additional expenditure as posing a risk to the achievement of the fiscal deficit target, given the expectations of capex undershooting the budgeted amount by at least Rs 1 trillion,” said Aditi Nayar, chief economist, ICRA.

 

Nayar said the net cash outgo under the first Supplementary Demands for Grants was relatively modest and could end up being offset by savings in departments other than those included in this supplementary, for instance, capital expenditure. 

 

The government has set a total expenditure target of Rs 48.2 trillion for the current financial year (FY25). This includes capital expenditure of Rs 11.1 trillion, of which the government has so far spent 42 per cent of the budget estimates in the April-October period. The government has spent 51 per cent of the total expenditure in the first seven months of this financial year.

 

The additional expenditure in the Supplementary Demands includes Rs 6,593.73 crore towards the fertiliser subsidy scheme, around Rs 9,000 crore for agriculture and farmer welfare, and Rs 8,000 crore towards defence. It also includes spending of Rs 3,000 crore towards expenditure by the external affairs ministry, and Rs 4,800 crore by the home ministry.

 

“Given the conditions in the economy, this additional expenditure will add to overall spending and will be useful for growth,” said Madan Sabnavis, chief economist, Bank of Baroda.