Government seeks nod for additional spending of Rs 60, 000 crore


NEW DELHI: The government on Wednesday sought parliamentary sanction for an additional spending of nearly Rs 60,000 crore, which involved cash outgo of over Rs 35,000 crore towards higher spending on rural employment guarantee scheme as well as pension liabilities of retired government employees.
The second supplementary demand for grants comes at a time when the government is staring at slower economic growth during the current financial year following demonetisation apart from a shortfall in its mop up from the sale of telecom spectrum and disinvestment.
A part of the shortfall may be met through higher tax collections via the Income Disclosure Scheme and the tax amnesty following demonetisation. In addition, some savings in budgeted spending could help the government stick to the fiscal deficit target of 3.5% of GDP.
So far, however, the government has not found surplus funds for infrastructure creation at a time when private sector spending remains low. There is no fresh allocation for printing notes in the second supplementary demand for grants.
A part of the over Rs 3,000 crore that the government has earmarked for higher farm spending has come via the cess that is levied on service tax. Similarly, Rs 1,500 crore for sanitation has come from cess.