New Delhi: With the Centre’s spending increasing through fertilizer subsidies, other West Asia-related spending and initiatives, such as electronics manufacturing schemes for semiconductors and mobiles, Finance Minister Nirmala Sitharaman may seek parliamentary approval for additional spending, without overshadowing the overall fiscal position.The discussion around the need for parliamentary approval is in contrast to his ministry’s earlier stance as it wanted to wait for more data to come in before assessing the situation. With the turmoil in West Asia still simmering, it is hard to have a clear picture, but officials indicated that spending so far is high and some spending, which will be offset through savings elsewhere, will need legislative approval.As of now, GST and direct tax revenues are on track and Sitharaman has been pushing the Department of Investment and Public Asset Management (DIPAM) to provide some relief through additional recovery. His meetings with DIPAM officials have helped the Center raise Rs 20,272 crore, a little more than one-fourth of the target, with more than two-thirds of the financial year left.If DIPAM manages to go ahead and finalize the IDBI Bank transaction, which has been in the pipeline for nearly five years, it will be a big relief. With only two players in the field, a lot will depend on whether Emirates NDB, which has already acquired a majority stake in RBL Bank.Fairfax, the other contender Prem Vatsa, has a 40% stake in Catholic Syrian Bank and the RBI will have a role in deciding its fate.At present, it is this additional expenditure which has prompted reconsideration of the first supplementary demand for grants as there is a need to settle the high fertilizer subsidy bill. While the department of fertilizers had sought to double the allocation, prices have softened compared to the peak in the last few weeks, providing some relief. Oil subsidies, which have increased greatly, will also have to be dealt with, although not immediately.The Rs 1.9 lakh crore stimulus for electronics manufacturing will require some additional allocation this year and other ministries are also preparing replacement plans for production-linked incentives, some of which may have to wait given the pressure on expenditure.For a government that has stuck to the fiscal deficit target despite facing some pressure almost every year, Sitharaman will try to maintain her record and achieve the target of 4.3% of GDP.
