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Major spike in petroleum, urea subsidies; Modi govt’s subsidy bill jumps by Rs 28,000 crore in first four months

Krishnanand Tripathi
Subsidy bill, food subsidy, petroleum subsidy, urea subsidy,

Subsidy Bill: Despite its effort to control the expenditure on subsidies, Prime Minister Narendra Modi’s government has spent Rs 1.7 lakh crore on subsidies in the first four months of this fiscal, which is 56% of the total budget estimate for this year. This is Rs 28,000 crore more than the amount spent during the same period last year. The Union government gives subsidy on four major items – food subsidy, subsidy on the sale of petroleum products, urea subsidy and subsidies on nutrient based fertilizers. All four heads have registered an increase in the first four months this year in comparison with the amount spent last year. However, the biggest increase has been registered in the expenditure of petroleum and Urea subsidy.

The Union government has spent over Rs 28,385 crore on the retail sale of petroleum products in this fiscal, which is more than three-fourth of the total estimate of Rs 37,478 crore for the year.

The government had spent just Rs 12,000 crore during the same period last year.

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Similarly, another major jump has come from the expenditure on Urea subsidies. The government spent Rs 21,568 crore on urea subsidy against Rs 12,354 crore spent last year. It spent Rs 9,214 crore more this year against the amount spent during the first four months of last year, an increase of 75%.

Food subsidy remains the biggest source of the Union government’s expenditure on subsidies. Modi government spent over Rs 1.085 lakh crore on food subsidy in the first four months, against Rs 1.077 lakh crore spent last year, a marginal increase of Rs 741 crore.

In her maiden budget, finance minister Nirmala Sitharaman estimated that food subsidy will account for 61% of the total subsidy bill of the government this year. She has allocated Rs 1.84 lakh core on food subsidy, 61% of the total allocation of Rs 3.01 lakh crore for four major items.

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The government expenditure on nutrient-based fertiliser subsidy also went up from Rs 9,533 crore to Rs 11,183 crore during the same period.