Govt seeks $14.78 bln extra spend in 2010/11

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The government on Tuesday sought parliamentary approval to spend a gross additional $14.78 billion in the fiscal year to end-March 2011, on top of the budget target of around $240 billion.Finance Minister Pranab Mukherjee sought lawmakers approval to spend a net additional $11.8 billion and documents presented by him in parliament said the proposed extra spending would not derail the government's plans to keep fiscal deficit capped at 5.5 percent of GDP in the current financial year."The net cash outgo ... will not have any adverse impact on the fiscal deficit projected in budget estimates 2010-11 due to excess receipts under non-tax revenue in 2010-11," according to the documents.Better-than-expected 1 trillion rupees ($21.6 billion) of receipts from third-generation (3G) wireless spectrum auctions against the budgeted 350 billion rupees boosted non-tax revenue receipts for the year, which some officials and analysts say could narrow the fiscal deficit by a full percentage point.These additional funds would be mainly used to pay oil retailers 140 billion rupees ($3.03 billion), as compensation for selling fuel below market rates, and 5.79 billion rupees as fertiliser subsidies, according to the documents.India also plans to spend 84.67 billion rupees to raise its vote share in the International Monetary Fund. There are calls for the IMF to recast itself and grant more powers to emerging economic powers like India, China, Brazil and Russia.The government seeks legislative nod for spending more than the budgeted estimates to finance increases in major expenditure heads such as interest payments and subsidies.Mukherjee in February, while setting the fiscal deficit target, had said the gap would be partially funded through market borrowings of 4.57 billion rupees.But expensive social and infrastructure projects could hike government spending and keep up the pressure on public finances. For instance, estimates presented by Farm Minister Sharad Pawar last week suggested a proposed food security law could nearly double the food subsidy bill to 1.07 trillion rupees.With the economy set to grow at 8.5 percent in the current fiscal year that began on April 1, India expects to collect about 7.47 trillion rupees in taxes in the year.So far, it has received 839.94 billion rupees in taxes in the first three months of the fiscal year and has spent 2.42 trillion rupees.(For more business news on Reuters India click http://in.reuters.com)
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