Indian finance minister Nirmala Sitharaman recently sought parliament’s approval for an additional spending of ₹2,35,852.87 crore during this fiscal amid a dip in tax collection and a demand for more fiscal stimulus to tackle the COVID-19 impact. The supplementary demand by the minister includes a total of 54 grants and one appropriation.
This first batch of supplementary demand includes ₹20,000 crore to shore up the capital base of state-run banks (infusion was not part of the budget for fiscal 2020-21) to facilitate further lending and ₹40,000 crore towards enhanced expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
The government’s budgeted fiscal deficit target for this fiscal was 3.5 per cent of the gross domestic product (GDP).
Of this demand, the proposals involving net cash outgo aggregate to ₹1,66,983.91 crore and gross additional expenditure, matched by savings of the ministries and departments or by enhanced receipts and recoveries aggregates to ₹68,868.33 crore, Indian media reported.
Demand for certain new items of expenditure, including the extra allocation for MGNREGS and ₹4,000 crore for the credit guarantee scheme for MSMEs, had to be made to provide for the relief package announced earlier this year.
The government has sought ₹46,602.43 crore to provide additional allocation under the post-devolution revenue deficit grant to states, in accordance with the recommendations of the Fifteenth Finance Commission.
Fibre2Fashion News Desk (DS)