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Informist, Tuesday, Dec. 10, 2024

 

By Priyasmita Dutta

 

NEW DELHI – Owing to prudent fiscal management by the government, it is likely to seek lower funds for additional expenditure in the first batch of Supplementary Demands for Grants for 2024-25 (Apr-Mar) compared to the demand made in the first batch last financial year, a top finance ministry official said Tuesday. In FY24, the government had sought an extraordinarily low first batch of supplementary demands, to the tune of just INR 584 billion. 

 

"We have done better this year," the official told Informist. The government presents supplementary demands to seek Parliament's approval for additional expenditure beyond what was approved in the Budget, and these are likely to include any additional spending on items such as food and fertiliser subsidies. For FY25, the government's total expenditure is pegged at INR 48.205 trillion, up 8.5% on year. 

 

The government typically tables the first Supplementary Demands for Grants in the Monsoon Session of Parliament. Since the Union Budget for FY25 was passed in July after the General Elections, the first batch of supplementary demands for this year will only be tabled in the ongoing Winter Session. In FY24 as well, the government had tabled the first supplementary demand for the year in the Winter Session, saying it was a reflection of improved budget management. 

 

The government's lower first batch of supplementary demand for FY25, too, is broadly on similar lines, with additional cushion coming from lower capital expenditure. In the first seven months of FY25, while the government's revenue expenditure was up 8.7% on year at 20.074 trillion, capital expenditure was down 14.7% on year at INR 4.665 trillion. Besides, since the full budget for FY25 was presented only in July, the government had better clarity of its finances.

 

The government's savings under any particular head can be rerouted to spending requirements in another department, lowering the net requirement for additional funds. 

 

Any additional spending over and above the budgeted expenditure poses the risk of fiscal slippage. However, because of robust revenues and muted spending in FY25, the government is broadly expected to not just meet, but do better than its fiscal deficit target for FY25. The government aims to lower the fiscal deficit to 4.9% this year from 5.6% in FY24.  End

 

Edited by Avishek Dutta

 

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