With general polls approaching, Modi government seeks parliament nod for extra spending
The Modi government said it would spend £1.27 billion for fertiliser subsidies and another £1.38 billion for rural job scheme.
Indian prime minister Narendra Modi addresses the media on the first day of the Monsoon Session of Parliament, in New Delhi on Thursday, July 20, 2023. (ANI Photo/Rahul Singh)
THE Narendra Modi government on Wednesday (6) formally requested parliamentary approval for an extra expenditure of Rs 1.29 trillion (£12.2 billion) in the ongoing fiscal year. The allocation is primarily intended for increased subsidies for farmers and support for a rural job-employment programme.
India will head to its national elections in 2024 with prime minister Modi and his ruling Bharatiya Janata Party (BJP) seeking their third consecutive term.
The government specified that the net supplementary spending for the current fiscal year, concluding on March 31, would amount to Rs 583.78 billion (£5.5 billion), with the remaining funds accommodated through reorganisation of existing expenses.
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The Modi government said it would spend Rs 133.51 billion (£1.27 billion) for fertiliser subsidies and another Rs 145.24 billion (£1.38 billion) for the rural job scheme.
The government has been doling out welfare measures through food and fertiliser subsidies, affordable cooking gas and other measures to energise the rural economy that has displayed signs of weakness.
The supplementary fertiliser subsidies will elevate the total subsidy for the current fiscal year by almost eight per cent, reaching Rs 1.88 trillion (£17.9 billion). Simultaneously, the rural income scheme, ensuring minimum wages, is set to see a nearly 24 per cent increase, totaling Rs 745.24 billion (£7.1 billion) for the ongoing fiscal year.
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In addition to the budgeted Rs 1.97 trillion (£18.7 billion) for the year, the government has requested an extra Rs 55 billion (£524.11 million) rupees for food subsidies. Despite the heightened allocation for fertiliser in this fiscal year, the expenditure in this category will remain lower than the Rs 2.51 trillion (£23.9 billion) spent in the previous fiscal year. Notably, government spending is predominantly allocated to food and fertiliser subsidies.
The additional spending this fiscal year will not lead to widening of the budget deficit beyond the target of 5.9 per cent of gross domestic output as tax collection is likely to be higher than expected, two government officials said on the condition of anonymity.