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Finance minister seeks extra funds for spending

Finance Minister Jaswant Singh asked Parliament on Tuesday for Rs 80.07 billion for extra government spending in 2002-03.

The government earmarked Rs 4103.09 billion for total spending in the federal Budget announced in late February.

The finance ministry tabled the request as part of the first batch of additional spending demands for the April-March financial year. It normally estimates its spending for the year in the Budget and then asks Parliament for supplementary grants when needed.

"Approval of Parliament is sought to authorise gross additional expenditure of Rs 80.07 billion," the ministry said in a statement.

The statement said the net cash outgo would be around Rs 39.13 billion and the remaining sum of about Rs 41 billion would be met from savings and higher receipts from various ministries.

A Rs 5 billion bailout package had been set aside for the country's largest mutual fund manager, the Unit Trust of India, to help it to meet a shortfall in some of its assured return schemes, the statement said.

State-run UTI, which stunned investors last year when it froze redemptions from its flagship fund, faced new problems when some of its maturing assured return schemes were hit by bad debt and plunging stock markets.

India aims to narrow its yawning fiscal deficit to 5.3 per cent in 2002-03 from 5.7 per cent in the previous year. But the final deficit picture will only start emerging towards the end of the year.

Analysts say a drought afflicting large parts of the country might force the government to boost spending in rural areas and that could widen the fiscal deficit.

Global ratings agencies say India's deficit is a big obstacle to raising its sovereign rating which is at junk bond levels.

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