Finance Minister seeks Parliament nod for total extra expenditure of ₹2.35-lakh crore.
Depite strained revenues, the government is not going to skimp on spending, and towards this end today proposed infusing ₹20,000 crore into public sector banks and allocating a further ₹40,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Programme.
Bank recapitalisation will not entail any fresh expenditure while the allocation for the rural employment guarantee scheme, as part of Atmanirbhar Bharat, will be a part of the Government’s demand for fresh spending of ₹1.67-lakh-crore. in FY21.
According to the first batch of Supplementary Demands for Grants, tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha, “Approval of the Parliament is sought to authorise gross additional expenditure of ₹2,35,852.87 crore. Of this, the proposals involving net cash outgo aggregate to ₹ 1,66,983.91 crore and gross additional expenditure, matched by savings of the Ministries/Departments or by enhanced receipts/recoveries aggregates to ₹ 68,868.33 crore.”
Net cash outgo means fresh mobilisation of resources either through borrowings or imposition of a new tax or cess. The government has already decided to borrow ₹4.2-lakh crore more than that proposed in Budget 2020-21.
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The Finance Ministry sought ₹20,000 crore for recapitalisation of public sector banks through issue of Government securities. “After taking into account the additional receipts on issue of securities to the public sector banks, this will not entail cash outgo,” the Ministry clarified.
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