The Government has pegged its outgo on food, fuel and fertiliser subsidy in the 2011-12 fiscal at around 13 per cent lower than the revised estimates for the current fiscal.

According to the Budget proposals, the Government’s subsidy bill on food, petroleum and fertilisers is estimated at Rs 1,34,210 crore for the 2011-12 fiscal against Rs 1,53,962 crore in the revised estimates for the current fiscal.

The oil subsidy, which is given to state-run oil firms, such as Indian Oil, BPCL and HPCL, for selling diesel, domestic LPG to households and kerosene through the PDS system below cost, is estimated at Rs 23,640 crore in FY’12 compared with Rs 38,386 crore in the current fiscal.

Interestingly, in the Budget estimates for 2010-11, the petroleum subsidy was pegged at Rs 3,108 crore, although it was revised to Rs 38,386 crore in the latest estimates.

The Government’s food subsidy, given to run the public distribution system, is estimated to decline marginally to Rs 60,572 crore next fiscal from Rs 60,599 crore in 2009-10.

Food subsidy is provided to meet the difference between the economic cost of foodgrains and their sales realisation at the Central Issue Price fixed under the public distribution system (PDS) and other welfare schemes.

The fertiliser subsidy is also pegged lower at Rs 49,997 crore in the next fiscal against Rs 54,976 crore in the 2010-11 financial year.

Under the fertiliser subsidy, the Government would provide Rs 13,308 crore for indigenous (urea) fertilisers, Rs 6,983 crore for imported (urea) fertilisers and Rs 29,706 crore for the sale of decontrolled fertilisers (DAP, MOP and complexes) at a subsidised rate to farmers.

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