The finance ministry has asked various ministries and departments to submit by February 10 the third and final batch of supplementary demands for grants, if any, for the current fiscal, which will be taken up in the Budget session of Parliament. However, the department of economic affairs (DEA) also asked them to “contain the expenditure within the approved RE (revised estimate) ceilings”, which were decided in meetings with the finance ministry around November 2021.
The government has already received Parliamentary clearance for an additional gross expenditure of Rs 5.6 lakh crore through two batches of supplementary demand for grants for this fiscal. The net cash outgo, however, was pegged at Rs 3.2 lakh crore; the rest was to be met through savings or enhanced receipts of various ministries and departments. While the government had targeted a marginal expenditure cut in FY22 to Rs 34.8 lakh crore, it could end up exceeding the Budget estimate by about Rs 2.4 lakh crore to Rs 37.2 lakh crore, up almost 7% from the last fiscal, driven particularly by inflated food and fertiliser subsidy, according to an Icra estimate.
In an office memorandum, the DEA made it clear that fresh expenditure proposals will be entertained only where advances from the Contingency Fund have already been granted or where payments need to be made urgently against court decrees. The proposals would also include those where the fund requirement can be met through re-appropriation of savings within a department but only after Parliamentary approval.
While the net tax revenue is expected to cross the Budget estimate by about Rs 2-2.5 lakh crore this fiscal, a likely shortfall in disinvestment proceeds and additional expenditure commitments would offset this gain and prevent the Centre from trimming fiscal deficit sharply in FY22 from the budgetted 6.8%, analysts have said.