A worried Finance Minister Pranab Mukherjee Wednesday said he is losing sleep over the rising subsidy bills, notably on food, fertiliser and petroleum products.

"As finance minister when I think of the enormity of the subsidies to be provided, I lose my sleep,” Mukherjee said here at a conference to discuss reforms in the public distribution system (PDS).

Due to a sharp increase in subsidies and decline in tax and other revenues, the fiscal deficit is expected to be around 5.6 percent as per some estimates, against the budgetary target of 4.6 percent.

An widening fiscal deficit coupled with the slowdown in economic growth and persistent inflationary pressure have complicated the situation for the finance minister, who on March 16 would present the union budget for fiscal 2012-13.

Mukherjee said there was a need to boost food production through a “second green revolution” that would help reduce the food subsidy bill.

“We did achieve our self-sufficiency in food by the Green Revolution, but we now need that second revolution that will take us to a new trajectory where we can feed all and feed them with a view to ensure nutrition balance as well.”

Mukherjee said the government had initiated a programme to take the green revolution to the eastern region of the country.

He also said more investment in agricultural infrastructure was required, which over the last few years had seen "a turnaround in its declining trend”.

Addressing the opening session of the two-day conference in which Union cabinet ministers, food and agriculture ministers from states and senior government officials are taking part, Mukherjee said procurement of foodgrains and enhancement of storage capacity in view of the proposed National Food Security Act.

The finance minister called for joint efforts by the centre and states to modernize the PDS to make its reach more effective to the targeted people. He said the unique identification numbers or “Aadhaar” would help curb leakages.

“The use of the Aadhaar number in PDS will reduce duplicates, fakes and ghost beneficiaries in PDS databases which will result in reducing wastage and diversion in the system,” he said.