India’s budget is likely to increase large subsidies by 8% to $47 billion in the next fiscal year Reuters
By Sarita Chaganti Singh and Mayank Bhardwaj
NEW DELHI (Reuters) – India is likely to increase spending on food, fertilizers and cooking gas subsidies to 4.1 trillion rupees ($47.41 billion) in the next fiscal year, government sources said, a modest increase of 8 % on an annual basis. to cover higher food and energy costs.
India’s Finance Minister Nirmala Sitharaman will present the national budget on February 1, amid slowing growth in Asia’s third-largest economy and rising global uncertainties.
The latest economic slowdown is largely attributed to weaknesses in urban regions and corporate investment. The rural economy, where a large part of the main subsidies are distributed, is showing signs of recovery and the sustainability of the subsidies will be a key support.
The government has estimated that its food subsidy bill will increase by about 5% for the next fiscal year starting April 1 to nearly 2.15 trillion rupiah ($24.86 billion), one of the sources said.
Higher rice purchases from farmers and rising storage costs are expected to increase food subsidies next year, the source said.
Estimated expenditure on food subsidies in the current financial year ending March 31 is 2.05 trillion rupees ($23.70 billion).
Subsidies, including food, fuel and fertilizers, accounted for about 8% of the country’s total annual spending of $557 billion for the current fiscal year.
The government is also expected to allocate nearly 250 billion rupees ($2.89 billion) for cooking gas subsidies, another source said, up from 119 billion rupees ($1.38 billion) in the current fiscal year.
The fertilizer subsidy for the next financial year is likely to remain at the current year’s level of 1.7 trillion rupees ($19.66 billion), a third source said.
India’s finance, food and fertilizer ministries did not immediately respond to separate emails seeking comment on the subsidies.
(1 USD = 86.51 Rupees)
