The Telegraph
Saturday , December 8 , 2012
Since 1st March, 1999
CIMA Gallary

Govt gets nod to spend more

New Delhi, Dec. 7: The government today sought parliamentary approval to spend an additional Rs 32,120 crore in the current fiscal, while ruling out additional borrowing.

The majority of the additional spending will be on oil subsidies and equity infusion in Air India as part of a turnaround plan, according to the “first supplementary demand for grants” tabled in the Lok Sabha by finance minister P. Chidambaram.

The proposals envisaged in the supplementary demands involved a cash outgo of Rs 30,804 crore, while the remaining amount would be matched by savings by different ministries and departments.

Chidambaram told reporters outside Parliament that the additional spending would be “Rs 28,500 crore for petroleum subsidy, about Rs 2,000 crore for infusion of equity in Air India and Rs 300 odd crore for some small items. So this amount we think we can accommodate within the present borrowing limit. We don’t think at this moment we need to borrow anything more than what is indicated.”

The government had budgeted market borrowing at Rs 5.7 lakh crore during the current fiscal to bridge the expenditure-revenue gap.

Analysts said achieving a fiscal deficit of 5.3 per cent of gross domestic product (GDP) would be a tough task as the government was banking heavily on generating large sums from the auction of second-generation (2G) mobile phone spectrum.

But the auction yielded just Rs 9,047 crore, way below the target of Rs 40,000 crore. The government plans to have an auction of still-unsold telecom spectrum before March and has cut the reserve price by 30 per cent.

The finance minister had earlier said that the fiscal deficit might go up to 5.3 per cent of GDP against the budget estimate of 5.1 per cent for the current financial year.