Subsidy bill to fall by Rs 18,000 cr

The government's subsidy bill on food, fertiliser and petroleum, among others, will fall by about Rs 18,000 crore (Rs 180 billion) at Rs 1,11,275 crore (Rs 1112.75 billion) this fiscal, mainly due to sharp reduction in the urea dole outs.

While, the fertiliser subsidy will fall to Rs 49,980 crore (Rs 499.80 billion) in 2009-10 from the Rs 75,848 crore (Rs 758.48 billion) in the revised estimate for 2008-09, the food subsidy bill is estimated to increase by 20 per cent to Rs 52,489 crore (Rs 524.89 billion) from Rs 43,627 crore (Rs 436.27 billion) in the last financial year.

The total subsidy outgo in 2008-09 was Rs 1,29,242 crore (Rs 1292.42 billion). The food subsidy is provided to meet the difference between the economic cost of foodgrains and their sales realisation at Central Issue Price fixed for public distribution system (PDS) and other welfare schemes.

Petroleum subsidy, which is given to state-run oil firms for selling domestic LPG to households and kerosene to PDS system at below cost, is projected to rise to Rs 3,109 crore (Rs 31.09 billion) in 2009-10 from Rs 2,876 crore (Rs 28.76 billion) in the revised estimates for 2008-09.

Expenditure under interest subsidies and other subvention is estimated at Rs 5,696 crore (Rs 56.96 billion), taking the government's total subsidy bill to Rs 1,11,275 crore in this fiscal.

Under the fertiliser subsidy, the government would provide Rs 9,780.25 crore (Rs 97.80 billion) for indigenous (urea) fertilisers, Rs 5,947.94 crore (Rs 59.47 billion) for imported (urea) fertilisers and Rs 34,252.06 crore (Rs 342.52 billion) for sale of decontrolled fertilisers with concession to farmers.