The Hindu Business Line : Fiscal deficit target would be met despite additional net cash outgo: Chidambaram

The Finance Minister, Mr P. Chidambaram, said on Tuesday that revenue deficit and fiscal deficit targets for 2006-07 would be met despite the gross additional expenditure of Rs 21,823.92 crore, for which Parliament approval has now been sought.

"Our revenue collections are buoyant. Despite the additional net cash outgo, we will be able to meet the fiscal deficit and revenue deficit targets for the current year," Mr Chidambaram told Lok Sabha while presenting the second batch of supplementary demands for grants for 2006-07.

Of the gross additional expenditure of Rs 21,823.92 crore, the proposals involving net cash outgo aggregated to Rs 11,444.76 crore and gross additional expenditure, matched by savings of the ministries/departments or by enhanced recoveries/receipts aggregated to Rs 10,378.64 crore.

Cash outgo of Rs 11,444.76 crore included fertilisers' subsidy of Rs 3,700 crore, interest subvention of Rs 1,000 crore on short-term credit to farmers, interest relief of Rs 1,359.13 crore to the debt stressed farmers of Andhra Pradesh, Kerala, Karnataka and Maharashtra, recoupment of national calamity contingency fund to the extent of Rs 500 crore and normal and special central assistance of Rs 3,436 crore.

Approval for cash outgo of Rs 100 crore has been sought for compensation to state governments for revenue loss due to the introduction of value added tax (VAT).

The Finance Minister said that an additional amount of Rs 3,700 crore was sought for fertiliser subsidy primarily on account of the need to import 50 lakh tonnes of urea to meet the rise in consumption.

While a total of Rs 4,400 crore was required for meeting expenditure on fertiliser subsidy, he said that about Rs 700 crore of this would be financed through recoveries.

Later, Mr Chidambaram declined to comment on the stock market crash of Tuesday. "I have already commented yesterday. In fact there is no need for any comment," he told reporters when asked about the fall in stock market indices.