Centre to Seek Parliamentary Nod for Extra Spending on Subsidies, Electronics
The government is likely to approach Parliament for approval of additional expenditure, driven by rising costs of fertiliser subsidies and initiatives to boost electronics manufacturing, according to official sources. Finance Minister Nirmala Sitharaman is expected to present a fresh demand for grants in the ongoing session or a supplementary Demands for Grants in the next session.
The need for extra funds stems from the fertiliser subsidy bill, which has exceeded the budgeted estimate due to global price pressures and the need to keep prices affordable for farmers. Additionally, the production-linked incentive (PLI) scheme for electronics manufacturing has seen strong uptake, requiring higher disbursements than originally planned.
Despite the additional spending pressure, the government remains committed to its fiscal deficit target of 4.3% of gross domestic product (GDP) for the current financial year. Revenue collections from goods and services tax (GST) and direct taxes are on track, providing some headroom. The Department of Investment and Public Asset Management (DIPAM) is also pushing for higher realisations from disinvestment, including the strategic sale of IDBI Bank.
The closure of the IDBI Bank transaction could provide significant financial comfort to the exchequer, sources said. However, the exact amount of additional spending sought will be determined after assessing the overall fiscal situation.
Parliamentary approval for extra spending is a routine procedure when ministries exceed their allocated budgets. The government must seek authorisation from Parliament through a supplementary Demands for Grants or an Appropriation Bill. This ensures transparency and accountability in public finance.
Economists noted that the additional spending, if not matched by revenue gains, could put pressure on the fiscal deficit. However, the government’s track record of fiscal discipline and robust tax collections may mitigate risks.
