Government seeks nod for Rs 2.4 lakh crore extra spending

NEW DELHI: Finance minister Nirmala Sitharaman on Monday sought Parliament’s approval for extra spending of Rs 2.4 lakh crore, out of which the cash outgo totalled Rs 1.7 lakh crore, largely for meeting expenditure linked to the Covid-19 pandemic.
In the first batch of supplementary demand of grants presented in Parliament, the Centre has sought Rs 40,000 crore for increased spending under the Mahatma Gandhi National Rural Employment Guarantee Programme (MGNREGA), Rs 20,000 crore for infusion in public sector banks (PSBs) to enable them to meet regulatory requirements and Rs 33,772 crore for direct benefit transfer under the Pradhan Mantri Jan Dhan Yojana and National Social Assistance Programme.

The government has sought Rs 14,232 crore, including Rs 5,916 crore for meeting extra spending for containing the pandemic and Rs 2,475 crore for Indian Council of Medical Research. Economists said they had factored in most of the spending in their estimates for the fiscal deficit for the current fiscal year, which is expected to widen, given the stretched revenues and additional spending requirements.
“As can be seen, most of these expenditures are part of the announcements made by the government as part of Covid relief and hence these demands are formalisation of the process of incurring these expenses,” said Madan Sabnavis, chief economist at CARE Ratings.
He said demands (technical supplementary) also include Rs 20,000 crore for recapitalisation of state run banks, which is more likely to be through the issue of re-capitalisation bonds rather than an outflow from the Budget as it does not come under the ‘cash outgo’ as specified in the demands. It could also be financed from savings from other departments.