Government seeks nod for Rs 2.8 lakh crore additional spend

NEW DELHI: Govt on Tuesday sought Parliamentary approval for additional spend of over Rs 2.8 lakh crore, of which the cash outgo will be a little more than Rs 2 lakh crore, with a bulk of it going towards meeting the gold sovereign bond liability and meeting the higher food and fertiliser subsidy bill.

The biggest outgo of Rs 59,000 crore has been proposed on account of additional outgo towards the gold reserve fund for sovereign gold bonds. The finance ministry did not elaborate on the reasons for the expenditure, although it is seen to be on account of a sharp increase in prices of yellow metal.

Another Rs 30,000 crore will be earmarked for transfers to municipal bodies, while Rs 42,000 crore is proposed on account of higher food and fertiliser subsidies.

"Although the net cash outgo under the second supplementary demand for grants has been pegged at a sizeable Rs 2 lakh crore, this is likely to be offset to a large extent by expenditure savings across ministries. For instance, govt of India's revenue expenditure needs to expand by a steep 30% YoY during Feb-March 2026 to meet the revised estimates for FY2026, entailing an incremental amount of Rs 2.3 lakh crore.

Consequently, we do not expect a material fiscal slippage on this account," said Icra principal economist Aditi Nayar. Last Dec, the Centre had brought the first supplementary demands for grants seeking Parliament nod for gross extra spending of Rs 1.3 lakh crore, and net additional spending of Rs 41,455 crore.