The Finance Ministry on Wednesday sought approval for fresh cash expenditures of over ₹58,000 crore from Parliament. This includes ₹13,500 crore for fertilisers and over ₹4,500 crore for the free ration programme. At the same time, additional expenditure for the rural employment guarantee scheme and fund infusion in public sector expenditure companies will be met through savings and enhanced receipts/recoveries.
Experts say fresh cash outgo will not impact the budget estimate for the fiscal deficit, which is 5.9 per cent (₹17.87-lakh crore) of GDP.
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Minister of State for Finance Pankaj Chaudhary moved the first batch of supplementary demands for grants (SDG) for FY24 . The supplementary demands for grants include gross additional spending of over ₹1.29-lakh crore, which would be matched by savings of ₹70,968 crore.
The proposal involves a net cash outgo aggregating to ₹58,378.21 crore, said the document tabled in Lok Sabha. The additional spending includes an expenditure of ₹13,351 crore towards fertiliser subsidy, while ₹5,500 crore has been proposed as additional expenditure for food subsidy. It may be noted that the Cabinet recently decided to extend the free ration programme beyond December 31. Now additional out go for food subsidies will be required for the January–March period of the current fiscal.
SDG refers to the statement of supplementary demands laid before Parliament, showing the estimated amount of further expenditure necessary for a financial year over and above the expenditure authorised in the Annual Financial Statement for that year. The demand for supplementary grants may be token, technical or substantive/cash.
Token refers to a symbolic amount to be allocated for any scheme; technical means savings of a ministry or department to be used for a different purpose or for a scheme where more funds are required. Substantive/ cash implies fresh allocation beyond what is provided in the Budget and is to be met through fresh withdrawals from the Consolidated Fund of India.
The document also showed that additional expenditure in the form of more funds for the rural employment guarantee scheme will be met through savings, recovery/receipts. The same mechanism has been proposed for recpaitalisation of regional rural banks and for fund infusion in various public sector insurance companies on account of the award of bonus shares issued by the companies.
Experts feel the present SDG is not going to impact the overall fiscal deficit. Aditi Nayar, Chief Economist with ICRA, said: “The net cash outgo in the Supplementary Demand for Grants is moderate and could be matched by savings in other departments. This does not suggest a risk of the fiscal deficit target being overshot.”