Battling fiscal deficit, India to cut fertiliser subsidy for FY14
Fertilisers, after oil and food, account for the third-biggest share of India 's total subsidy bill, which is expected to rise to 2.4 percent of gross domestic product (GDP) in fiscal 2012/13.
The government had estimated the fertiliser subsidy at 609.7 billion rupees ($11.4 billion) for the fiscal year ending next month, but it is likely to be much higher than the target.
Based on the estimated subsidy level for 2012/13, a 15 percent cut would save the government nearly 91.5 billion rupees. Calculating from the projected fiscal deficit for this year, this would narrow the deficit by as much as 0.1-0.2 percentage point.
Finance Minister P. Chidambaram has staked his reputation on lowering the deficit to 5.3 percent of GDP to improve the investment climate following ratings agency threats to downgrade India 's sovereign debt to junk if action was not taken.
Reuters reported exclusively last week that, after small steps to reduce fuel subsidies, Chidambaram is now putting welfare, defence and road projects on the chopping block in a last-ditch attempt to hit his deficit target by next month.
A senior official at the fertiliser ministry with direct knowledge of the plan said the subsidy bill would be reduced by at least 15 percent or more in the next financial year, though the actual
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