Search the Internet          Tips  Sites: Finance, Investment

Sinha seeks Parliament nod for extra funds

Finance Minister Yashwant Sinha sought extra spending money on Wednesday as he presented the supplementary demands for grants for the current financial year ending March, in Parliament.

Sinha said the extra funds were needed for liquidating the oil pool deficit, meeting a shortfall in the country's largest mutual fund manager, Unit Trust of India, recapitalisation of the state-run Indian Bank and support to financial institution, Industrial Development Bank of India.

India has promised to end price controls on petroleum products by April 1, 2002 as a result of which dues on the oil pool account would be transferred to the central Budget.

The oil pool account is a complex cross subsidy scheme under which high prices of petrol are used to compensate firms for selling kerosene and cooking gas below cost.

The statement said the oil companies will be required to simultaneously invest the money received from the government in special government bonds.

The government is grappling to bridge its yawning fiscal deficit which is expected to widen to 5.7 per cent of gross domestic product in the current financial year from its earlier estimate of 4.7 per cent due to lower-than-expected revenues.

The finance ministry asked for funds totalling Rs 711.34 billion for additional spending in the April-March financial year.

"Approval of Parliament is sought to authorise gross additional expenditure of Rs 711.34 billion ($14.60 billion)," the statement presented in the lower house of Parliament said.

The net cash outgo of the total amount would be around Rs 65.51 billion, the statement said. The rest of the Rs 645.83 billion spending would be met from savings from various departments.

"A token amount is sought for conversion of the current loan of 9.74 billion extended to IDBI into 20-year convertible debentures with a coupon rate of 11.88 per cent," the statement said.

Sinha who presented the Budget for 2002-2003 last month, earmarked Rs 3,644.36 billion for total spending in the current financial, down from an earlier estimate of Rs 3,752.23 billion.

ALSO READ:
Savings scheme for entire salaried class in the offing: Sinha
Sinha ask industry to classify imports for 10-20% tariff regime
Somebody has to bear the cost: Sinha
The Rediff Budget Special
Money

Tell us what you think of this report