Parliament nod sought for extra spend of Rs 3.25 lakh cr on subsidy, capex

The government on Friday sought Parliamentary approval for net additional spending of over Rs 3.25 lakh crore in the current fiscal year on account of increased outgo on fertiliser subsidy, free food programme and additional capital expenditure. The additional spending includes a Rs 1.09 lakh crore payout on fertiliser subsidy.

Approval for Rs 80,348.25 crore has been sought for meeting expenditure of the food and consumer affairs ministry, mainly towards giving free foodgrains to the poor and Rs 29,944 crore for the Ministry of Petroleum and Natural Gas towards payments of LPG subsidies to oil marketing companies and LPG connections to the poor under the Pradhan Mantri Ujjwala Yojana.

The government has also sought approval for Rs 45,176 crore additional expenditure by the rural development ministry, which includes Rs 16,400 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). In addition, the government's capex has been enhanced by about Rs 31,000 crore for the current financial year.


This additional spending is over and above the FY23 budgeted total expenditure of Rs 39.45 lakh crore. Economists, however, said the government was unlikely to breach its FY23 fiscal deficit target.

“With savings likely under other heads, we do not see the supplementary demands resulting in a meaningful breach of the fiscal deficit target of 6.4% of GDP,” Aditi Nayar, chief economist, ICRA said. In absolute terms, the fiscal deficit could be higher, they said.

“Taking into account the additional expenditure outgo and expectations of higher than budgeted tax revenue collection, we estimate the Centre’s fiscal deficit to exceed the budget target by around Rs 0.8-1 lakh crore in FY23," said Rajani Sinha, chief economist, CareEdge.

As per the first batch of supplementary demands for grants tabled in the Lok Sabha by Minister of State for Finance Pankaj Chaudhary, approval is being sought for gross additional expenditure of about Rs 4.36 lakh crore.

Of this, proposals involving net cash outgo aggregate to over Rs 3.25 lakh crore and gross additional expenditure, matched by savings of ministries/departments or by enhanced receipts, aggregates to over Rs 1.10 lakh crore.

The additional expenditure includes Rs 13,669 crore and Rs 12,000 crore for meeting the spending requirements of the telecom and railways ministries, respectively, besides about Rs 10,000 crore for transfer to Goods and Services Tax compensation to states and Union Territories.

For meeting additional expenditure under capital outlay on Indian Railways (commercial lines), the supplementary demands for grants have proposed Rs 12,000 crore.