NEW DELHI: In an attempt to reduce food, fertiliser and oil subsidies and accordingly tame fiscal deficit, the government on Wednesday formed an Expenditure Management Commission (EMC) to be headed by Bimal Jalan, former RBI Governor.
The EMC, which has been given 18 months to submit its report, is expected to submit its interim report before Budget 2015-16 and the final report before Budget 2016-17.
The EMC’s other members include former finance secretary Sumit Bose and former RBI deputy governor Subir Gokarn.
Additional Secretary, Department of Expenditure, Ministry of Finance, will be an ex-officio member and a senior officer with finance/expenditure experience will be member-secretary.
As per estimates, the subsidy bill on food, petroleum and fertilisers put together is estimated at Rs 2,51,397.25 crore for 2014-15, up 2.47 per cent over the previous fiscal at Rs 2,45,451.50 crore (revised estimates for 2013-14).
It may be noted that Finance Minister Arun Jaitley, in his maiden budget last month, had announced the setting up of an EMC to look into various aspects of expenditure reforms to be undertaken by the government.
According to Jaitley, the idea was to review the allocative and operational efficiencies of the government expenditure to achieve maximum output.
The higher subsidy bill in 2014-15 was on account of increased allocation for fertiliser sector.
The government has pegged the total fertiliser subsidy higher at Rs 72,970.30 crore for full fiscal against Rs 67,970 crore proposed in the interim budget.
Similarly, subsidy for imported urea is pegged at Rs 12,300 crore, domestic urea is Rs 36,000 crore and sale of de-controlled fertilisers is Rs 24,670.30 crore.
For food subsidy, the government has allocated Rs 1,15,000 crore, which includes a provision of Rs 88,500 crore for implementation of the National Food Security Act.