NEW DELHI: The Finance Ministry wants to keep subsidies within a cap of about Rs 3 lakh crore, just a little above the interim budget estimates, mainly by putting a lid on fertiliser subsidy payments by expanding a pilot project and paying the subsidy directly to the farmer.
The government had budgeted for about Rs 75,000 crore towards fertiliser subsidy, another Rs 1.84 lakh crore towards food subsidy, and nearly Rs 37,500 crore towards cooking fuel subsidy in the interim budget.
Top officials said their aim was to keep the subsidy bill under Rs 3 lakh crore, even though the food subsidy bill may go up partly. “To achieve that we have recommended that the fertiliser subsidy, which is currently still being paid to firms, could be paid through direct cash benefit scheme, as was planned when the DBT scheme was conceived,” said an official.
A pilot project for 17 districts has been tried out since October 2017, wherein farmers were paid the subsidy directly into their accounts. Bringing in the DBT scheme in various fields has already saved the government some Rs 51,700 crore in infinancial year 2018-19. Officials said though the food subsidy bill could go up, there would be an attempt to pay the Fertiliser Corporation of India as much through subsidies as possible.
It has been a regular occurrence for the subsidy dues to the Food Corporation of India being rolled over and the unpaid subsidy being rolled over through short - term borrowings. According to a Comptroller General of Accounts report, the Central government underpaid subsidy to the FCI to the tune of Rs 69,394 crore in 2018-19.
This rollover amounted to about 40 per cent of the budget estimate. Of the total subsidy bill which included food, fertilisers and petroleum subsidies, only 74 per cent was paid out during 2018-19, against 83 per cent in the previous year, according to the CAG.