Subsidies grow marginally

The overall subsidy burden will go up marginally by 5% in FY18

The Centre on Wednesday quietly withdrew a Rs 4,500-crore subsidy that it gave to states for distribution of subsidised sugar through the public distribution system (PDS) which many said would from now onwards be the responsibility of the states. The allocation for FY18 has been lowered to Rs 200 crore, which is for payment of pending liabilities under the programme.

 

The word “subsidy”, in fact, found mention only once in the finance minister’s speech when he referred to credit-linked subsidy for 1,000 mini labs to be set up by qualified local entrepreneurs for testing of soil samples and their nutrient level.

 

The overall subsidy burden will go up marginally by 5 per cent in FY18. The food subsidy is estimated to be about 8 per cent higher next year at Rs 1,45,338.6 crore. The  petroleum subsidy is expected to come down by Rs 2,532 crore, indicating the government has not factored any increase in global petroleum prices.