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Informist, Thursday, Dec. 12, 2024

 

--Govt seeks net INR 441.43 bln in FY25 1st batch of supplementary demands 

--Govt seeks gross INR 877.63 bln FY25 1st batch of supplementary demands 

--Govt seeks OK for extra spending of INR 65.94 bln for fertiliser subsidy 

--Govt tables first batch of FY25 supplementary demands in Lok Sabha 

 

NEW DELHI - The government has sought Parliament's approval to spend net additional INR 441.43 billion in the first batch of Supplementary Demands for Grants for the current financial year ending March, according to the documents tabled in the Lok Sabha Thursday. The gross additional spending sought by the government is INR 877.63 billion.

 

Citing a top finance ministry official, Informist had reported on Tuesday that because of the prudent fiscal management by the government, the Centre is likely to seek lower funds for additional spending in the first batch of Supplementary Demands for Grants for FY25 as compared to the demand made in the first batch in FY24. In the last financial year, the government had sought net INR 583.78 billion in the first supplementary demands, which was an extraordinarily low amount.

 

Of the additional INR 441.43 billion sought by the government for this fiscal year, INR 65.94 billion is for the phosphatic

and potassic fertilisers subsidy scheme. Other major spending heads include INR 48.41 billion sought by the home ministry for additional expenditure of the police department. 

 

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 has been 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 first batch of supplementary demands for FY25 is lower likely because of 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 INR 20.07 trillion, capital expenditure was down 14.7% on year at INR 4.67 trillion. For FY25, the government's total expenditure is pegged at INR 48.21 trillion, up 8.5% on year.

 

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. Informist exclusively reported Wednesday, quoting a finance ministry official, that the government has the space to reduce its fiscal deficit for FY25 by 10-20 basis points below the Budget target of 4.9% of GDP.  End

 

Reported by Shubham Rana

Edited by Vandana Hingorani

 

 

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