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Our Bureau

New Delhi, Oct. 20 The Union Finance Minister, Mr P Chidambaram, on Monday sought Parliament nod for issuing oil bonds worth Rs 65,942 crore to oil marketing companies towards estimated “under recoveries” on account of sale of sensitive petroleum products.

Also, approval has been sought for providing fertiliser subsidy amounting to Rs 38,863 crore, issuing fertiliser bonds worth Rs 14,000 crore, payment of estimated Rs 21,000 crore towards the recommendations of the Sixth Central Pay Commission, payment of Rs 15,000 crore towards farm debt waiver and Rs 10,500 crore towards the National Rural Employment Guarantee Programme (NREG).

These additional expenses form part of the first supplementary demand for grants for 2008-09, which was tabled in the Lok Sabha on Monday. In all, approval of Parliament has been sought to authorise gross additional expenditure of Rs 2,37,265.54 crore.

Of this, the proposals involving net cash outgo stood at Rs 1,05,613.38 crore.

Finance Ministry sources admitted that the additional spend under the latest batch of supplementary demand for grants was on the higher side when compared with the previous occasions.

“Abnormalities in terms of developments in prices in the recent months and also inclusion of new items like the Sixth Pay Commission payments could be important factors behind the proposed high additional expenditure”, sources said.

The Government also proposes to spend Rs 4,064 crore (to Food Corporation of India) towards foodgrains subsidy.

It has also sought nod for payment of Rs 2,913 crore to International Monetary Fund towards capital payment for India’s quota increase.

Sources also highlighted that many of the additional expenditure like the oil and fertiliser bonds were off-balance sheet items.

The Prime Minister’s Economic Advisory Council had earlier this year estimated that the country’s fiscal deficit as a percentage of GDP would go up by another 5 per cent if the off-balance sheet items like oil bonds, fertiliser bonds were to be factored in for the assessment of fiscal deficit.

More Stories on : Petroleum | Govt Bonds

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