Budget 2024: Sitharaman's Budget cuts subsidy bill by 7.8% to Rs 3.81 trn

In a move that signals fiscal prudence, the government reduced its subsidy outlay for food, fertiliser, and fuel by 7.8 per cent in the full Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Tuesday.

The total subsidy allocation stands at Rs 381,175 cr for the current fiscal, down from the previous year's figure of Rs 413,466 cr. This reduction aligns with the estimates projected in February's interim budget.

Breaking down the allocations, the food subsidy has been set at Rs 205,250 cr, a decrease from the revised estimates of Rs 212,332 cr for the fiscal ending March 31, 2024.

This subsidy covers the difference between the economic cost of foodgrains procured by the government and their sales realisation under the National Food Security Act (NFSA) and other welfare schemes, benefiting approximately 80 cr individuals.

The fertiliser subsidy has seen a more significant cut, with Rs 164,000 cr earmarked for 2024-25 against the revised estimates of Rs 188,894 cr for the previous fiscal.

This subsidy supports manufacturers and helps maintain affordable prices for farmers, covering both urea and non-urea fertilisers like DAP and MOP.

Petroleum subsidies, primarily for cooking gas (LPG), have been marginally reduced to Rs 11,925 cr, down from Rs 12,240 cr in the 2023-24 revised estimates.

The government's decision to maintain the subsidy estimates from the interim budget suggests a calculated approach to balancing fiscal consolidation with welfare measures.