Centre seeks Parl nod for additional Rs 1.9 lakh crore spend

NEW DELHI: The Centre on Tuesday sought

Parliament

’s approval for additional spending of approximately Rs 1.9 lakh crore as part of the first batch of supplementary demands for grants for 20121-22, out of which the net cash outgo would be Rs 23,675 crore, a major chunk to be spent on health.


The supplementary demand for grants was tabled in the Lok Sabha by finance minister Nirmala Sitharaman. While the gross additional spending is nearly Rs 1.9 lakh crore in the 2021-22 fiscal year, the actual cash outgo will only be Rs 23,675 crore. The remaining amount will be met through savings and higher receipts and recoveries.

The demands for grants showed that a significant portion of the total gross spending would be for transfer to states for shortfall in goods and services tax (GST) compensation cess. Approximately Rs 1.6 lakh crore would be transferred to states as backto-back loans as part of the GST compensation shortfall, but there would be no cash outgo on account of this.

“As the back-to-back loans are to be met from equivalent capital receipts, the ... expenditure will not entail any additional cash outgo,” according to the supplementary demand for grants. To bolster the fight against Covid and shore up the health infrastructure, Rs 16,463-crore extra spending has been set aside for the department of health and family welfare. An additional Rs 526 crore has been given to the department of health research for emergency epidemic preparedness and response.

Approval for Rs 2,050 crore for the civil aviation ministry has been sought, which includes Rs 1,872 crore towards loans and advances to state-run carrier Air India for recoupment of advance from the Contingency Fund of India.

The cash outgo also includes Rs 1,100 crore for the

ministry of consumer affairs

, food and public distribution towards providing assistance to sugar mills for the 2019-20 sugar season.

Economists said the backto-back loans for GST compensation will not impact the Centre’s fiscal deficit.

“It appears that the outgo of more than Rs 90,000 crore for the free foodgrain provision in May-November 2021, is being absorbed by the cushion created in this year’s Budget, on account of the prepayment of the

FCI

’s loans to the

NSSF

in FY2021,” said Aditi Nayar, principal economist at ratings agency

ICRA

.

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