JOIN USSubsidy bill shoots up in 2023-24 to Rs 5.62 lakh crore
The subsidy bill grew by Rs 2.06 lakh crore over the estimate to touch Rs 5.62 lakh crore this fiscal, with the government attributing the increased spending on this count to a "sudden outbreak of geopolitical conflict" that jeopardised food and energy security.
In the 2022-23 Budget, it was estimated that the government would have needed Rs 3.55 lakh crore to dole out a variety of subsidies.
The main reason attributed for the rise this fiscal, according to the latest budget documents, to the extension of the free food grain programme PMGKAY upto December 2022 and greater spending on fertiliser subsidies to shield farmers from the negative effects of an increase in global fertiliser prices.
The documents said there were "higher requirements" for maintaining the food subsidy net as well as subsidy for urea towards payments for indigenous urea and import of urea and "higher allocation" for nutrient based subsidy on the sale of indigenous/imported decontrolled Phosphatic and Potassic fertilizers at concessional rate to the farmers.
It also said, "in FY 2022-23, due to the sudden outbreak of geopolitical conflict that jeopardised food and energy security, there was a higher food and fertiliser subsidy requirement for supporting the vulnerable and ensuring macroeconomic stability."
For 2023-24, the government however expects that the subsidy bill come down as the impact of Covid-19 will be bare minimum and has now estimated that it may only need Rs 4.03 lakh crore. The major subsidies -- food, fertiliser and petroleum -- is estimated to be around Rs 3.75 lakh crore, which is 1.2% of the GDP.
The Budget documents showed that the food subsidy touched Rs 2.87 lakh crore in 2022-23 as against an estimate of Rs 2.06 lakh crore. For 2023-24, it has now pegged it at Rs 1.97 lakh crore following recalibration of the food distribution scheme.
The fertiliser subsidy also witnessed a massive jump -- Rs 1.05 lakh crore in Budget estimates to Rs 2.25 lakh crore in revised estimates for this fiscal. For the next financial year, it has been pegged at Rs 1.75 lakh crore.
The petroleum subsidy also grew -- Rs 9,170 crore in revised estimates as against Rs 5,812.50 crore in budget estimates. The subsidy bill on fuel is likely to come further down to Rs 2,257.09 rore. The subsidy bill on petroleum has come down basically because of the drop in LPG subsidy.