Govt pegs lower subsidy Bill in 2010-11

The government has pegged outgo towards food, fuel and fertiliser subsidy in 2010-11 at over 12 per cent lower than the revised estimates of this fiscal.

According to the Budget proposals, the total subsidy bill for 2010-11 is pegged at Rs 1,08,666.91 crore as against Rs 1,23,936.26 crore in the revised estimates for the current fiscal.

Petroleum subsidy, which is given to state-run oil firms, such as Indian Oil, BPCL and HPCL, for selling domestic LPG to households and kerosene to PDS system at below cost, is estimated to come down at Rs 3,108 crore from Rs 14,954 crore.

Interestingly, in the Budget estimate for 2009-10 petroleum subsidy was pegged at Rs 3,109 crore, although it was finally Rs 14,954 crore (as per revised estimates).

The government's food subsidy, given to run the public distribution system, is estimated to decline marginally to Rs 55,578.18 crore next fiscal from Rs 56,002 crore in 2009-10.

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.

Fertiliser subsidy is also pegged lower at Rs 49,980.73 crore in next fiscal from Rs 52,980.25 crore.

Under fertiliser subsidy, the government would provide Rs 15,980.73 crore for indigenous (urea) fertilisers, Rs 5,500 crore for imported (urea) fertilisers and Rs 28,500 crore for sale of decontrolled fertilisers (DAP, MOP and complexes) with concession to farmers.