The Centre has proposed an additional cash outgo of over Rs 41,500 crore under the First Supplementary Demands for Grants, primarily to meet fertiliser subsidy requirements and compensate oil marketing companies for LPG under-recoveries.
Despite the gross additional expenditure of Rs 1.32 lakh crore, the move is unlikely to derail the fiscal deficit target of 4.4% of GDP, with over Rs 90,000 crore expected to be met through savings across ministries.
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Among this Rs 18,500 crore of the new outgo is earmarked for fertiliser subsidies (indigenous & imported P&K fertiliser and imported urea), with another Rs 12,500 crore funded through savings.
Another Rs 9,400 crore is allotted for compensating PSU OMCs for domestic LPG under-recoveries, along with Rs 5,200 crore more through savings.
Among the funds, Rs 2,500 crore is set aside for Ladakh to meet additional expenditure relating to apportionment of liabilities between Ladakh and Jammu & Kashmir.
The Supplementary Demands for Grants is a statement presented to Parliament that outlines the estimated additional expenditure required during a financial year, beyond what was approved in the Annual Financial Statement. These supplementary grants can be of three types, token, technical, or substantive (cash).
Token is a nominal amount (often around Rs 1 lakh) allocated to enable spending on a new scheme or item without altering the overall budget significantly. Technical means utilisation of savings within a ministry or department for a different purpose or to cover shortfalls in an existing scheme. Substantive is a fresh allocation over and above the budgeted amount, requiring withdrawal from the Consolidated Fund of India to meet additional expenditure.
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