Subsidy Bill Rises Rs 1930 Crore

He has, however, tried to balance the additions to the subsidy bill on food and fertiliser by drastically cutting down interest subsidy which would be Rs 1,257 crore in the current year. The allocation interest subsidies is a mere Rs 34.23 crore for the coming year.

Despite this effort, the direct subsidy bill has been pegged at a high level of Rs 18,250 crore for 1997-98, an increase of 11.83 per cent over the current year's level of Rs 16,320.16 crore.

The rate of growth in subsidy is, however, much lower than the 31 per cent increase registered in 1996-97 over the earlier year.

Non-plan expenditure will increase by 13.10 per cent to Rs 1,69,628.92 crore in the coming year as compared to the revised estimate for the current year.

The food subsidy has been increased to Rs 7,500 crore, up by Rs 1,434 crore from the budget estimates of Rs 5,884 crore in 1996-97. The increase is Rs 894 crore in comparison with the revised estimate of Rs 6,606 crore for the current year.

The finance minister has allowed a 18 per cent increase in fertiliser subsidy by pegging Rs 9,190 crore for the purpose, up from the revised estimate of Rs 7747 crore in the current year.

Even the enhanced outlay on food subsidy will not be enough as the government had earlier indicated that the total cost of food subsidy will be Rs 8,200 crore. The finance minister has said that the government will take up the revival of some public sector companies, indicating that there will be an increase in interest subsidy during the course of the year.

In his speech, Chidambaram said, When the dual card system under the targeted PDS takes effect throughout the country, if more funds are required, I shall provide the same.

Compared to the revised estimates for the current year, subsidy on indigenous (urea) fertiliser has been raised from Rs 4,743 crore to Rs 5,240 crore, up by Rs 497 crore.

Subsidy on imported (urea) fertiliser has grown by Rs 400 crore, from the revised estimate of Rs 1,350 crore to Rs 1,950 crore. The budget proposals include an increase of Rs 326 crore on the sale of decontrolled fertiliser with concession to farmers. The subsidy on this score is Rs 2,000 crore against the revised estimate level of Rs 1,674 crore. There is also a small increase of Rs 40 crore on the subsidy on export promotion and market development. The subsidy element on this score has increased from Rs 400 crore in the revised estimate to Rs 440 crore for the coming year. Interest subsidies will come down sharply to Rs 34 crore from the revised estimate level of Rs 1257.22 crore as the government is no more supporting the six PSUs has selected for revival in the current year.

But this is bound to go up because the finance minister has indicated that the government will take up more PSUs for revival in due course.

Three other items of subsidy have seen sharp increases. The increases are on railways for dividend relief and other concessions (Rs 71 crore), subsidy to shipyards (Rs 23.52 crore) and compensation for foreign exchange loss of financial institutions (Rs 14 crore).

There is, however, a reduction of Rs 20 crore on the subsidy for maintenance of buffer stocks of sugar and Rs 13.77 crore on the handloom industry.