Finance Ministry on Thursday sought approval of fresh cash expenditure of over ₹44000 crore mainly on farm sector. However, this is unlikely to impact the fiscal deficit target of 4.9 per cent, as prescribed in the full budget for Fiscal Year 2024-25, presented in July this year.

Fresh expenditure is part of first Supplementary Demands for Grants (SDG), presented in the Lok Sabha. SDG is presented when the amount authorised for the current financial year (CFY) is insufficient, and the need arises for additional expenditure on an existing service or a new service not contemplated in the annual financial statement for that year, and for recouping the Contingency Fund Advance. Provided under article 115 of the Constitution, SDGs are not just for meeting additional expenditure; they also provide tools for enabling corrections in the economy by way of using limited resources where they are required most.

“Approval of the Parliament is sought to authorise gross additional expenditure of ₹87,762.56 crore. Of this, the proposals involving net cash outgo aggregate to ₹44,142.87 crore and gross additional expenditure, matched by savings of the Ministries/Departments or by enhanced receipts/recoveries aggregates to ₹43,618.43 crore,” the introductory note of the SDG said. Also, token provision of ₹126 lakh has been sought, for enabling re-appropriation of savings in cases involving New Service or New Instrument of Service.

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Agriculture & Farmers Welfare Ministry has big share in net cash outgo with an amount of over ₹7600 crore. This includes over ₹3100 crore for PM Kisan Saman Nidhi. PM Kisan is a Central Sector scheme fully funded by Central government. It became operational from December 1, 2018. Under the scheme an income support of 6,000 per year in three equal instalments will be provided to all land holding farmer families. The Centre has disbursed over ₹3.46 lakh crore in 18 instalments since inception. The Agriculture Census 2015 mentions about operational holdings which is around 14.65 crore.

The second big amount is for fertiliser subsidy. The Ministry said that SDG is required to meet expenditure towards subsidies of ₹7310.00 crore under P&K Fertilizers Subsidy Scheme. “Taking into account savings of ₹716.27 crore available under the same Section of the Grant, the above expenditure will entail a cash outgo of ₹6593.73 crore,” SDG document said.

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The full budget has made a provision of total expenditure of ₹48.21 lakh for full fiscal. Data from Controller General of Accounts (CGA) showed that over ₹24.7 lakh crore or 51.3 per cent of budget estimates has been spent between April and October. If compared with corresponding period of last fiscal, the expenditure grew by over 3.3 per cent. However, during the same period revenue has seen a growth of over 8.7 per cent.

Earlier, a senior Finance Ministry official had said that provision under SDG would be within the budget estimate. Also, since growth rate of receipt is higher than that of expenditure, there is possibility of saving. This means despite net cash outgo of over ₹44000 crore, there would be no requirement for additional borrowing.