Govt seeks nod to increase net spending by $5.2 billion in FY17
Finance Minister Arun Jaitley sought parliamentary approval on Wednesday to increase net spending by $5.2 billion (nearly Rs 34,594.3 crore) in the current fiscal year that ends in March 2017.
The supplementary demand for more funds, the second to come before the Lok Sabha, had been expected for some months. In August, lawmakers had approved $3.1 billion (nearly Rs 20,623.53 crore) in additional spending for the current fiscal year.
The request comes after the latest data showed a healthy 7.3% expansion in the Indian economy over the September quarter was led by state spending, while investment and private consumption were weak.
Prime Minister Narendra Modi`s government must also contend with the fallout from his dramatic decision a month ago to abolish high-value banknotes accounting for 86% of the cash in circulation.
The bid to purge the economy of "black cash" - undeclared income and the proceeds of corruption or racketeering - has caused huge economic disruption, making government spending a key prop for Asia`s third-largest economy.
The extra spending includes Rs 4,000 crore for a rural jobs programme, Rs 3,100 crore for the farm ministry and Rs 1,100 crore to cover a higher pensions bill, according to the request which is likely to be approved because the lower house has a large government majority.
The supplementary demand also sought parliamentary approval to cover the cost of repayment obligations under the so-called Market Stabilisation Scheme (MSS), a facility run by the Reserve Bank of India (RBI) to absorb up to Rs 6,00,000 that have flowed back into the banking system following the so-called demonetisation.
Jaitley, when he unveiled his annual budget in February, earmarked Rs 19,780,00 ($291.4 billion) in total spending, up 11.6% from the prior year. He will unveil his next budget at the beginning of February.