The Lok Sabha on Monday cleared the second batch of Supplementary Demands for Grants authorising the government to spend an additional Rs 3.73 lakh crore during the current fiscal amid protest by the Opposition over various issues.
The extra spending includes infusion of over Rs 62,000 crore into the company that holds residual assets and liabilities of Air India; Rs 58,430 crore by way of additional fertiliser subsidy; Rs 53,123 crore towards payment of pending export incentives; and Rs 22,039 crore to rural development ministry for transfer to the National Rural Employment Guarantee Fund.
The Lower House passed the second batch with voice vote, permitting the government to spend an additional Rs 3.73 lakh crore.
Talking about the Supplementary Demands for Grants, Finance Minister Nirmala Sitharaman said additional cash outgo of Rs 2.99 lakh crore is because of big ticket expenditure going for Air India and rise in fertiliser subsidy due to firming up of global prices.
“We have to ensure that the farmers don’t suffer because of it (rise in global prices). And therefore, increase in the subsidy for fertiliser has been provided, which itself is accounting for Rs 58,431 crore,” she said.
As per the Supplementary Demands for Grants, there would be net cash outgo of over Rs 2.99 lakh crore and Rs 74,517 crore extra expenditure would be matched by savings by different ministries.
As per the document, Rs 62,057 crore would be given to the Civil Aviation Ministry for equity infusion in Air India Assets Holding Company (AIAHL) for repayment of past government guaranteed borrowing and past dues/liabilities of Air India.
In October, the government signed a share purchase agreement with Tata Sons for the sale of Air India, along with low-cost carrier Air India Express and ground handling arm AISATS, for Rs 18,000 crore. The amount includes payment of Rs 2,700 crore in cash and takeover of Rs 15,300 crore of the carrier’s debt.
As of August 31, Air India had a total debt of Rs 61,562 crore. Of the total amount, Talace (a Tata Group company) will take over Rs 15,300 crore and the remaining Rs 46,262 crore will be transferred to AIAHL.
As per the Supplementary Demands for Grants, an additional Rs 2,628 crore would be given towards loans and advances to Air India for recoupment of advance from the Contingency Fund of India.
Besides, the Department of Food and Public Distribution would be given an additional Rs 49,805 crore for meeting expenditure towards various schemes of food storage and warehousing.
About Rs 2,400 crore would be given to the Department of Commerce for meeting expenditure towards subsidies under the ‘Interest Equalisation Scheme’, and investment under the Export Credit Guarantee Corporation (ECGC) scheme, among others.
Besides, over Rs 5,000 crore and more than Rs 4,000 crore have been earmarked for additional spending by the ministries of defence and home, respectively.
The Budget 2021-22 had projected the government’s total expenditure at Rs 34.83 lakh crore. But this is expected to overshoot considering the two batches of Supplementary Demands for Grants presented by the government so far.
The government had in August received Parliament nod for net additional spending of Rs 23,675 crore in the first batch of Supplementary Demands for Grants.
About Rs 14,000 crore additional amount was sought for the Ministry of Housing and Urban Affairs, including for meeting the requirement for non-performing assets under the Prime Minister’s Street Vendors’ Atmanirbhar Nidhi (PM SVANidhi) and grants for creation of capital assets under the Pradhan Mantri Awas Yojna Urban (PMAY-U).
For meeting additional expenditure towards grants for creation of capital assets under MPLADS (Members of Parliament Local Area Development Scheme), the government has proposed Rs 1,153 crore for the current fiscal year.