Govt to spend Rs. 12,000 crore more in FY11

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Just days after presenting the Budget, the government has come out with some big numbers as additional expenditure for the current fiscal year. As as much Rs. 12,000 crore, which wasn't previously budgeted, will be the overspent.

Finance minister Pranab Mukherjee has asked for Parliament's approval for an additional expenditure of a whopping Rs. 69,000 crore. However, Mukherjee maintains he is well within his Budget estimates and this expenditure won’t hurt the fiscal deficit target of 5.1 per cent.

“We’ve provided Rs. 68,000 crore in the third batch of supplementary. But most of this will spill over to the next fiscal. Therefore there is no question of over-shooting the numbers,” said Mukherjee.

Out of an additional net cash spend of around Rs. 68,918 crore, the government says around Rs. 57,000 crore has already been factored in in the revised expenditure estimates for FY11. The balance, i.e., Rs. 12,000 crore, which is the actual overspent, will be matched by savings in other grants by March 31.

Hence, the government will be able to stick to its revised expenditure estimate of Rs. 12.16 lakh crore for this year, which has already been stepped up from the earlier projection of Rs. 11.09 lakh crore.

The government also maintains that it is trying to clear its pending subsidy payments from previous years so that the burden does not spill over into the next fiscal. Though this is true for food and fertiliser subsidies, allocations for fuel subsidy will continue to be an exception.