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Rupee fall likely to hit govt finances with ballooning subsidy bill

The finance ministry has hinted that India's fertiliser subsidy bill for 2022-23 (FY23) could rise to around Rs 2.5 trillion against Budget Estimates (BE) of Rs 1.05 trillion

Populist, popular, welfare in  context of subsidy
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Retail inflation has remained above the 7-per cent mark for three consecutive months until June and above the upper tolerance band of the central bank of 6 per cent for the sixth straight month.

Asit Ranjan Mishra New Delhi
A depreciating rupee — that touched Rs 80 per dollar in intraday trade on Tuesday — may adversely impact central government finances through a higher subsidy bill, albeit higher inflation possibly increasing government revenue. 

With already elevated crude and fertiliser prices due to the ongoing Russia-Ukraine stand-off, an eroding rupee will add to the import bill and subsequently the subsidy burden on the government.

The government sells fertilisers at subsidised rates to farmers and provides cooking gas subsidies through Pradhan Mantri Ujjwala Yojana (PMUY).

“Subsidy burden of the government will increase with a depreciating rupee because a very high

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