Indian government to raise public spending by Rs25,727 crore

The government on Tuesday came out with the first batch of supplementary demands for grants seeking to raise public expenditure by an additional Rs25,725 crore during the current fiscal.

The extra spending will take the total budget expenditure of the government from Rs10,20,000 to Rs10,45,725 crore.

The expenditure proposals include providing funds to NACIL, additional money towards Commonwealth Games, National Calamity Contingency Fund, metro projects and food and fertiliser subsidies, among others, according to the supplementary demands tabled by finance minister Pranab Mukherjee in the Lok Sabha.

Government is planning to infuse Rs800-crore equity into the ailing National Aviation Company of India Ltd (NACIL), the state owned company which operates Air India.

Although the government is seeking Parliament's nod to raise public expenditure by Rs30,943 crore during 2009-10, the net impact would be Rs25,725 crore as Rs5,217 crore would be met through savings.

The government comes out with several batches of supplementary demands for grants during the course of the financial year to modify expenditure proposals made in the budget and also seek Parliament's approval for incurring additional expenses not anticipated at the time of formulation of the budget.

For the current fiscal, the government in its budget in July had pegged the total expenditure at Rs10,20,000 crore, which will now go up by Rs25,725 crore.