The parliament on Friday approved Finance Minister Pranab Mukherjee’s plan to spend an extra Rs309.4bn, which include subsidies on food and fertilizer.
The fiscal deficit would not overshoot the estimated 6.8% of gross domestic product (GDP) target for the fiscal year ending March 2010, the Finance Minister told the parliament while seeking approval for extra spending. But, he added that revenue deficit, which stands at 73.1% of the annual projection so far, is a cause for concern.
Mukherjee also said that India’s financial performance this fiscal year was in line with budget estimates.
The Finance Minister told the parliament that tackling food-price inflation is crucial for the Indian economy. India is facing difficulties in importing some food items while the prices of some commodities are higher abroad, he said.
Mukherjee said that he is happy with the industrial output data for October and said that third-quarter GDP growth will be in line with industrial expansion. He spoke to reporters in New Delhi.
The Government would spend an extra Rs30bn on fertiliser subsidies and Rs34.6bn on food subsidies, Mukherjee told the parliament on Dec. 8. The Centre would also spend Rs8bn on an equity infusion in public sector airlines Air India.
The emergency fire-fighting measures unleashed to mitigate the impact of the global financial crisis was worth Rs1.86 trillion and the Government faces a difficult fiscal situation, the Finance Minister told the parliament.
The Government has no plans to borrow more than estimated after it sought the approval of the parliament to fund its additional proposed expenditure in the current fiscal year, the Finance Minister said.
Mukherjee also said that the Government would complete stake sales through public issues in three public sector companies by the end of March. Divestment of 5% each in NTPC and Rural Electrification Corp. (REC) and 10% in unlisted Satluj Jal Vidyut Nigam Ltd. is under implementation, he added.