Government seeks House nod for additional cash spend of Rs 1.5 lakh crore

NEW DELHI: The government on Monday sought authorisation from Parliament for additional spending of over Rs 2.7 lakh crore during the current financial year, involving net cash outgo of Rs 1,48,133 crore. A large chunk of the cash out is accounted for by higher allocation towards fertiliser subsidy, pension payments and other expenses of defence ministry and GST compensation payment to the states and Union Territories.
While Rs 34,000 crore is proposed to meet the higher pension bill for enhancement in OROP, over Rs 6,000 crore will go towards other revenue expenses of the defence ministry. One of the biggest head will be the over Rs 36,000 crore subsidy paid for urea and phosphorus and potassium as the government has sought to cushion farmers from the impact of higher global prices on farmers.
For compensation payment, the Centre has sought permission to spend over Rs 33,500 crore as a follow-up to the recent meeting of the GST Council, where finance minister Nirmala Sitharaman had announced that funds will be released from the Consolidated Fund of India and will be later recouped when the cess money flows in. The idea was to clear all the dues of the states.
Over Rs 25,000 crore is also proposed to be spent to support telecom infrastructure in backward areas through the Universal Service Obligation Fund. Analysts are closely watching the Centre’s fiscal number in the wake of higher spending as well as lower-than-expected collections from heads such as disinvestment. Besides, the income tax department is also keeping close tabs on the fourth instalment of advance tax payments, which are due by Wednesday.
“The net cash outgo under the supplementary demand for grants is dominated by fertiliser subsidiary, defence pensions, the telecom sector and GST compensation, which account for 73% of the total amount. Although a portion of the net cash outgo of Rs 1.5 lakh crore may be offset by savings under other heads, it has raised the likelihood of a modest slippage relative to the revised estimate of the FY2023 fiscal deficit of Rs 17.6 lakh crore,” said Aditi Nayar, chief economist at ICRA.