Chidambaram seeks parliamentary approval for more spending
Finance Minister P.Chidambaram on Friday sought parliamentary approval to spend a net additional 308.4 billion rupees in the current fiscal year that ends in March 2013, which would further swell the fiscal deficit.
The demand comes on top of the budgeted target of around 275 billion dollars, mainly to meet the rising cost of subsidies such as in oil, documents presented by Chidambaram in parliament showed.
The government has said it will borrow 5.7 trillion rupees through federal government securities in 2012-13 ending March.
"The amount is very small. 28,500 crore rupees (285 billion rupees) for petroleum subsides, 200 crore (2 billion rupees )rupees for infusion of equity into Air India and 300 odd crore rupees for some small items. So this amount, we think we can accommodate within the present borrowing limit. We don't think at the moment we need to borrow any more than what was indicated when the budget was originally presented," Chidambaram told the reporters in New Delhi.
The deficit during the April-October period rose to 3.68 trillion rupees (USD 67.5 billion), or 71.6 percent of the budgeted fiscal year 2012-13 target.
Chidambaram recently revised the fiscal target to 5.3 percent from an earlier estimate of 5.1 percent of GDP, but most economists expect the government to overshoot this and hit around 5.5-5.6 percent, which could mean an additional borrowing of 300-500 billion rupees.
India's fiscal deficit is the widest among many emerging economies due to huge subsidy-based spending.