New Delhi: The government showed fiscal responsibility by cutting subsidies for food, fertiliser, and fuel by 7.8% in the 2024-25 Budget presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Tuesday.
The subsidy allocation for this fiscal year is Rs 3,81,175 crore, which is lower than last year's Rs 4,13,466 crore. This decrease corresponds to the forecasts made in the interim budget released in February. Analyzing the distribution, the food subsidy is now Rs 2,05,250 crore, down from the revised figures of Rs 2,12,332 crore for the fiscal year ending March 31, 2024.
This financial aid helps approximately 80 crore people by bridging the gap between the government's purchasing cost and the selling price of foodgrains under the National Food Security Act (NFSA) and other welfare programs. The reduction in the fertiliser subsidy is more pronounced, with Rs 1,64,000 crore allocated for 2024-25 compared to the revised estimates of Rs 1,88,894 crore for the previous year. This financial assistance aids producers and ensures reasonable prices for farmers, including both urea and non-urea fertilisers such as DAP and MOP.
Subsidies for petroleum, mainly for LPG used for cooking, have been slightly decreased to Rs 11,925 crore from Rs 12,240 crore in the revised estimates for 2023-24. The decision by the government to uphold the subsidy estimates from the interim budget indicates a strategic effort to balance fiscal consolidation and welfare initiatives.
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