Govt seeks Parliament approval for debt repayment

NEW DELHI: The government on Monday sought Parliament’s approval to spend extra Rs 1,676 crore for the Sarva Siksha Abhiyan Scheme, Rs 1,008 crore for transfer to the Universal Service Obligation Fund and Rs 254.9 crore as payments to financial institutions in the first batch of supplementary demand for grants.

The net cash outgo in the first supplementary is Rs 5,063 crore. The gross extra expenditure — to be matched by savings — is Rs 33,558 crore. A major component of the extra expenditure, which does not entail any cash outgo, is the Rs 22,665 crore for repaying the Centre’s past dues to the National Small Savings Fund (NSSF).

States have been prepaying high cost loans taken from the Centre in the past and these proceeds will, in turn, be repaid to the NSSF. An additional Rs 4,625 crore is the extra gross budgetary support to state plans — which does not entail cash outgo.

Payments to FIs covers transfer of equity (face value of Rs 1,500 crore) at book value of Rs 254.9 crore and subordinate debt of Rs 350 crore at face value held by the RBI in IDFC.

Investment of subordinate debt will be simultaneously matched by receipts by raising floating rate bonds for a face value of Rs 350 crore. It entails a cash outgo of Rs 254.9 crore.