Food items and fertilizer subsidies hiked, petroleum subsidy cut
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In line with its claim to work for the interests of the villages, poor people and the farmers, the Modi government has hiked food and fertilizer subsidies in the Budget. However, petroleum subsidy has been cut substantially over the previous budgetary estimate.
For the upcoming financial year 2021-22, the Central government has estimated to spend Rs 2,42,836 crore on food subsidy, while the budgetary estimate of food subsidy during the last financial year 2020-21 was Rs 1,15,570 crore. Thus, food subsidy has been increased by Rs 1,27,266 crore that is, 110 per cent in the ensuing financial year as compared to the budgetary estimate of the previous financial year.
Similarly, Rs 79,530 crore is estimated to be spent on fertilizer subsidy in FY 2021-22, which is an increase of Rs 8,221 crore that is, 11.82 per cent higher than the previous year's budget estimate of Rs 71,309 crore.
However, both food and fertilizer subsidies have been cut if compared to the revised estimate of the previous financial year. Due to the free grain distribution scheme during the coronavirus period, the food subsidy is expected to increase significantly over the budget estimate in the last financial year. The revised estimate of last financial year 2020-21 on food subsidy is Rs 4,22,618 crore, which is nearly 266 per cent more than the provision made for food subsidy in the budget of the last financial year.
Similarly, a provision of Rs 71,309 crore was made for fertilizer subsidy in the last financial year, while its revised estimate is Rs 1,33,947 crore.
Food subsidy is associated with the poor while fertilizer subsidy benefits the farmers in villages.
At the same time, talking about petroleum subsidy where a provision was made to spend Rs 40,915 crore in the budget of the last financial year, only Rs 12,995 crore has been spent in the upcoming fiscal 2021-22. Thus, petroleum subsidy has been cut by nearly 215 per cent as compared to last year's budget. The petroleum subsidy has also been cut by 198 per cent from the revised estimate of Rs 38,790 crore in the previous financial year.
