In the first batch of Supplementary Demands for Grants for the current fiscal, Finance Minister Nirmala Sitharaman on Thursday (November 28) sought the Parliament’s approval for an additional expenditure of ₹21,246.16 crore, including over ₹8,820 crore in the union territories of Jammu & Kashmir and Ladakh.
The first batch of Supplementary Demands for Grants for the financial year 2019-20 was tabled in both the Houses of Parliament on Thursday. Sitharaman said of the total spend, cash outgo will be about ₹19,000 crore. The government has sought ₹8,820.62 crore as grants for union territories Jammu & Kashmir and Ladakh in lieu of the erstwhile state’s share of 14th Finance Commission Award.
Another ₹4,557 crore will be infused in the IDBI Bank through recapitalisation bonds, while ₹2,500 crore will go into recapitalsation of state-owned insurance companies. The Union Budget for FY20, presented in July, had estimated a total government spending of ₹27.86 lakh crore, excluding expenses of public-sector companies.
The finance minister sought ₹1,500 crore to meet the additional expenditure towards payment of pay and allowance of armed forces and another ₹666 crore for meeting expenditure of Department of Space. As much as ₹3,387.46 crore has been provided in the supplementary demands for grants for meeting expenditure towards salaries and cost of the ration of police.
About ₹1,000 crore has been sought for providing additional funds under the scheme for free LPG connection to poor households. A sharp cut in corporate tax rates and lackluster growth in goods and services tax collections, amid a marked downturn in the economy, have squeezed government finances this year.
The Indian economy expanded by 5% in April-June, its slowest annual pace since 2013 and the projections are that it may have slowed down further in the second quarter, making six consecutive quarters of slowing growth, a first since 2012. This despite a recent series of fiscal stimulus, including a reduction in corporate tax rates.
Growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries. So far, the government has maintained that it will stick to the fiscal deficit target of 3.3% of GDP for 2019-20 and has no plans to revise it.
(With inputs from agencies)