Government's subsidy bill grew to Rs 6.48 lakh crore this fiscal, a rise of around 147% from the 2020-21 budget estimation of Rs 2.62 lakh crore, owing to huge rise in food and fertiliser subsidies given to people in the wake of Covid-19 pandemic.
For the 2021-22 fiscal, the government has now earmarked Rs 3.69 lakh crore with food and fertiliser subsidies cornering the major portion of the amount allocated.
Latest budget documents showed that the food subsidy touched Rs 4.22 lakh crore this fiscal as against the budget estimates of Rs 1.15 lakh crore -- an increase of Rs 3.07 lakh crore from initial allocation -- after the government announced free food grains for the poor and marginalised, including migrant workers, who were affected by the pandemic.
Similarly, the fertiliser subsidy rose to Rs 1.33 lakh crore from the budget estimates of Rs 71,309 crore -- an increase of Rs 62,638 crore -- with the government taking steps to provide relief to farmers.
However, the petroleum subsidy came down -- revised estimates at Rs 39,054.79 crore as against an allocation of Rs 40,915.21 crore -- as the government increased the excise duty and imposed cess.
Interestingly, the government had planned to bring down subsidies during the 2020-21 fiscal with the budget last February proposed a decrease by 22.48% in 2020-21 to Rs 2.62 lakh crore from Rs 3.38 lakh crore. However, the pandemic upset the government plans.
In the coming fiscal, the Ministry of Finance has estimated that the food subsidy would cost Rs 2.42 lakh crore and fertiliser subsidy at Rs 79,529 crore. Both are an increase from the original allocation in February last year.
However, the petroleum subsidy has been reduced substantially to Rs 14,073.35 crore for LPG and no allocation for kerosene subsidy.