| Despite its populist image, the government has managed to rein in subsidies by over Rs 5,200 crore over the budgeted figure for the year, primarily by making huge savings in subsidies for both food as well as in the sale of decontrolled fertilisers.
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| The total outgo on major subsidies has been reckoned in the revised estimates to be only around Rs 44,707.26 crores, against the original budget allocation of Rs 49,907.27 crores.
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| According to the details given by finance minister Jaswant Singh in his interim budget, the outgo on all major subsidies, barring that on indigenous fertilisers, has remained far below the outlays earmarked for them in the 2003-04 budget.
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| While the food subsidy is estimated (revised estimate) to remain at around Rs 25,200 crores, some Rs 2,600 crores below the budgeted figure of Rs 27,800 crores, the petroleum subsidy will be down Rs 1,543.25 crores to Rs 6,572.75 crores from budgetary allocation of Rs 8,116 crores.
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| In the case of fertiliser subsidy, the government will have to shell out an additional Rs 584.5 crores as subsidy to the indigenous producers of urea.
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| The subsidy on the decontrolled fertilisers is estimated to remain around Rs 3,656 crores, against Rs 4,456 crores provided for it in the budget. This marks a saving of nearly Rs 800 crores.
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| Similarly, though the 2003-04 budget had provided Rs 709.25 crores for subsidising imported urea fertilisers, the actual outgo on this account is expected in the revised estimates to be merely Rs 1 crore.
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| In the case of other subsidies, too, the actual estimated expenditure is likely to be only around Rs 930.93 crores, against the budgetary allocation of Rs 1,091.69 crores, down by Rs 160.76 crores.
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| These subsidies include expenditure incurred on activities like market intervention for agricultural produce, maintenance of sugar buffer, reimbursement of internal transport charges for exported sugar and Haj subsidy, among others.
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| The drop in food subsidy this year is attributed largely to the pruning of the excessive buffer stock due to exports and increased allocation to states for drought relief operations.
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| This has reduced the carrying cost of the grains though the difference between the effective acquisition cost of wheat and rice and their sale prices for the targeted public distribution system (TPDS) and exports remained quite wide. This difference is met through subsidy.
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| The saving of nearly Rs 708 crores on the imported urea has been possible because of near absence of imports in the wake of demand stagnation. Similarly, the subsidy on the decontrolled fertilisers remained relatively low because of lower consumption. |
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