Government asks Parliament for nod for additional expenditure of Rs 1.07 Lakh Cr; Focus on the fertilizer subsidy

On March 14, the government sought parliamentary approval for net additional expenditure of over Rs 1.07 lakh crore, including about Rs 15,000 crore for fertilizer subsidy, in the third batch of additional requests for the current exercise. According to the third batch of additional grant applications filed in the Lok Sabha, approval is sought for additional gross expenditure of more than Rs 1.58 lakh crore.

Of this amount, the proposals involving net cash outflows total more than Rs 1.07 lakh crore and gross additional outlays offset by ministry/departmental savings or improved revenue total more than Rs 50,946 crore.

For the payment of the fertilizer subsidy, the government has requested additional funds of Rs 14,902 crore and Rs 4,950 crore for capital injection into the National Bank for financing infrastructure and development and recapitalization of utility companies. public sector general insurance, according to the document.

There are four public sector general insurance companies – New India Assurance Company, National Insurance Company Ltd (NICL), United India Insurance Company Ltd (UIICL) and Oriental Insurance Company Ltd (OICL). The government has also sought funding for the recapitalization of regional rural banks RRB), the third and final batch of additional grant applications said.

To meet the additional expenses related to the payment of pensions and other retirement benefits for defense personnel, the government has requested additional funds of Rs 1,028.50 crore. With regard to meeting the expenses of additional transfer to the GST compensation fund, the government has requested Rs 8,141.76 crore and additional Rs 150.99 crore to cover the expenses of additional transfer to the GST compensation fund for UTs.

For the various programs of the Ministry of Housing and Urban Affairs including Credit Linked Subsidy Scheme (CLSS) Houses for the Economically Weaker Section (EWS) and Pradhan Mantri Awas Yojna an additional amount of 30,169.69 crores of rupees was requested. The third and final batch of supplemental grant applications for 2021-2022 includes 77 grants and one appropriation.

In Rajya Sabha, Minister of State for Finance Pankaj Chaudhary tabled the Supplementary Grant Applications, 2021, as well as the 2022 Budget for the Union Territory of Jammu and Kashmir. Total central government expenditure for 2021-22 is estimated at Rs 37.70 lakh crore (Revised Estimate or RE), which is higher than the Budget Estimate (BE) of Rs 34.83 lakh crore.

For 2022-23, total central government expenditure was estimated at Rs 39.45 lakh crore in the 2022 budget, representing an increase of 13.3% and 4.6% from BE and RE of 2021- 22, respectively. The total fertilizer subsidy reached Rs 85,300 crore during the nine-month period. Of this amount, the subsidy of Rs 49,800 crore was on urea and the balance of Rs 35,500 crore on phosphate and potash (P&K) fertilizers.

The government fertilizer subsidy had reached a record high of Rs 1,38,500 crore in 2020-21. A large portion of the subsidy was spent on urea at Rs 99,500 crore, followed by P&K fertilizers at Rs 39,000 crore. The government makes fertilizers, namely urea and different grades of P&K fertilizers, available to farmers at subsidized prices through manufacturers/importers.

The P&K fertilizer subsidy is governed by the Nutrient Based Subsidy (NBS) scheme as of April 2010. In the case of urea, the Center has set maximum retail prices and reimburses the difference between the price and cost of production in the form of subsidy.


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