Bulk of cash outgo to aid COVID battle

The Finance Ministry has sought the Parliament’s approval for fresh gross additional expenditure of ₹1.87 lakh crore through the first supplementary demand for grants in 2021-22, entailing a net cash outgo of about ₹23,675 crore.

Most of this actual outgo is earmarked for the battle against COVID-19, with almost ₹17,000 crore allocated to the Ministry of Health, while ₹1,750 crore has been sought to compensate banks for the compound interest component of the loan moratorium granted to borrowers last year.

‘GST dues to States’

The gross expenditure of ₹1.87 lakh crore also includes the ₹1.59 lakh crore to be raised through back-to-back borrowings for paying States’ GST dues.

Last Thursday, the Centre released ₹75,000 crore to States through such borrowings and the balance is expected to be borrowed in the second half of the current financial year.

“The pending GST compensation for the period April 2020-March 2021 has been pegged at a sizeable ₹81,179 crore,” said ICRA chief economist Aditi Nayar.

“The financing options for the pending dues for April 2020-January 2021 remain unclear,” she added.

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