Economic Survey 2013: High crude prices push up subsidy bill
A day before Finance Minister P Chidambaram presents the next Budget that is likely to focus on spurring growth, the Economic Survey 2012-13 said, "Addressing the key fiscal risk of petroleum subsidies is critical in better fiscal marksmanship."
The government has pegged the oil subsidy at Rs 43,580 crore, food subsidy at Rs 75,000 crore and fertiliser subsidy at Rs 60,974 crore, taking the total subsidy bill to 1,79,554 crore in 2012-13.
"With recent reforms in diesel prices and efforts at expenditure reprioritisation, the medium-term fiscal consolidation plan is credible and could yet again yield macroeconomic dividends in terms of higher growth and price stability," said the survey placed in Parliament by the Finance Minister today.
To check the increasing subsidy burden, the government had raised diesel prices by Rs 5 per litre and capped the number of subsidised cylinders at six per household in a year in September, 2012.
In January, 2013, the government also allowed oil marketing companies to raise diesel prices in small measures periodically. However, in order to protect household budgets, it simultaneously raised the annual LPG cap from six to nine cylinders.
But with international crude oil prices averaging at USD 107.52 a barrel in the first three quarters this fiscal, the government's payout to keep domestic retail price of auto, cooking
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