What is India's government allocating ₹1.3 lakh crore for?

The Indian government is allocating ₹1.3 lakh crore through supplementary demands for grants, primarily for fertiliser subsidies, urea imports, and compensating oil companies.

How will India's fiscal deficit target be affected by new spending?

The net additional spending of ₹41,455 crore is unlikely to significantly impact the government's fiscal deficit target for the current financial year.

What was India's real GDP growth in July-September?

India's real GDP growth for the July-September quarter reached a six-quarter high of 8.2%.

Home / Business and Economy / India Boosts Spending: ₹1.3 Trillion for Subsidies & Imports

India Boosts Spending: ₹1.3 Trillion for Subsidies & Imports

1 Dec

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Summary

Government plans ₹1.3 lakh crore additional spending for subsidies.
Funds allocated for fertiliser, urea imports, and fuel price compensation.
Net additional spending is unlikely to impact the fiscal deficit target.

India Boosts Spending: ₹1.3 Trillion for Subsidies & Imports

The Indian government has tabled supplementary demands for grants, seeking parliamentary approval for an additional expenditure of ₹1.32 lakh crore for the fiscal year 2025-26. A substantial portion of these funds, amounting to ₹11,000 crore, is designated for fertiliser subsidies, alongside ₹7,525 crore for urea imports and ₹9,473 crore to offset losses incurred by state-run oil-marketing companies on fuel sales. This fiscal boost also encompasses additional revenue spending by the Union home and education ministries.

The net cash outgo from these proposals is approximately ₹41,455 crore, which is not expected to significantly disrupt the government's fiscal deficit target of ₹15.69 trillion. Factors such as potential savings in effective capital expenditure and strong Gross Domestic Product (GDP) growth are projected to absorb this extra spending. Other allocations include funds for higher education, the direct tax department, and development packages for Manipur and Ladakh.