Modi government is spending on explicit subsidies in FY17, which shall be kept a bit more than Rs.2.4 lakh crore. However, the budgeted figure was R2.32 lakh crore.
The aggregate subsidy bill from agencies like oil marketers, fertiliser companies and the Food Corporation of India will be higher by another Rs.20,000 crore. This amount can later be rolled over, as shared by officials and published at The Financial Express.
While the progress expected in Direct Benefit Transfer (DBT) the subsidy bills could be controlled to a large extent by next year. But international commodity prices can cause some distress and upset the calculations.
This revised estimate will actually ask for an extra Rs.9,000 crore as food subsidy. This amount will be used to repay the loan of Food Corporation of India (FCI) which it had taken from the National Small Savings Fund (NSSF). FE reported earlier that the NSSF will release Rs.45,000 crore from its corpus to the FCI before the current financial year ends so as to clear the money it owes to the Centre. The revised estimate of food subsidy will be pegged at some Rs.1.44 lakh crore for FY27 crossing the budget of Rs.1.35 lakh crore.
The Modi government’s hands are tied because of the Rs.32,000 crore shortfall in spectrum revenue. Even after providing an extra Rs.9,000 crore for food subsidies, it could still roll over subsidies worth Rs.20,000 crore–Rs.10,000 crore for food, Rs.5,000 crore for fertiliser and Rs.5,000 crore for fuel.
Article By: Jagdeep