Despite its strict austerity measures, the finance ministry on Friday tabled the first supplementary demand for grants, an additional spending of Rs 32,119.50 crore for this fiscal.
The proposals that entail a total cash outgo of Rs 30,804 crore will be used to meet the oil subsidy and incentivise states to switch to direct cash transfer as well as infuse equity into ailing national carrier Air India.
However, finance minister P Chidambaram expressed confidence that the government would be able to accommodate the additional spending within its budgeted borrowing plan, that has been fixed at Rs 5.69 lakh crore.
“Rs 28,500 crore of petroleum subsidy, about Rs 2,000 crore for infusion of equity in Air India and Rs 300-odd crore for some small items. We don’t think at this moment we need to borrow anything more than what is indicated,” he told reporters.
Mindful of its strained finances, this is the government’s first supplementary demand for grants in 2012-13 as against the usual practice of tabling the first demand in the Monsoon Session of Parliament. In all, the government usually seeks permission from Parliament thrice in a financial year (apart from the Budget) for additional spending.
“We have tried to limit it to as much of an accounting practice as possible. Only token demands will be included in the second supplementary demand for grants in the Budget session now,” a senior finance ministry official said.
The government has also sought a token amount in the supplementary for discharging its liability towards International Monetary Fund (IMF). Under the new arrangements to borrow, India has to pay around Rs 11,295 crore, it said, adding “as savings are available in the same section of the Grant, a token supplementary is sought.”