This may come as a hint at what could be in store for various sectors in the Budget. Finance minister P Chidambaram on Saturday told the Rajya Sabha that the government favors revisiting subsidies doled out to different sectors in the past. The government?s total subsidy bill totals over Rs 100,000 crore and is mounting on account of the rising fuel bill.
?We must re-visit subsidies once in three years or five years to remove non-merit sectors and focus on only deserving sectors,? he said replying to a debate in the Rajya Sabha on Bills seeking supplementary grants for a total of Rs 33,290 crore.
However, the government is unlikely to tinker with the food, fertiliser and fuel bills in a Budget that comes just ahead of the general elections.
In the recent past, the government has said on a few occasions that it would want to revisit sops dolled out to the corporate sector to plug revenue leakages.
?It is nobody?s case that all subsidies will go. We are not reducing subsidy for PDS. The budgeted provision was higher than the previous year and we have not increased the issue price of PDS (ration),? he said. Addressing the full Planning Commission meeting last month, Prime Minister Manmohan Singh had also expressed concern over the mounting subsidy bill exceeding Rs 1 lakh crore on food, fertilisers and petroleum.
According to the government?s latest data, the country?s fiscal deficit has risen to 54.5% of the budget estimate (BE) by October end this year totaling Rs 82,256 crore. It was at 58.6% of the BE in the same period last fiscal.
Revenue deficit too has risen slightly to 80.5% of the BE, amounting to Rs 57,562 crore till October 31, 2007. It was marginally lower at 79.4% of the BE during the same period last fiscal.
Total government revenue stood at Rs 2,86,646 crore during the first seven months of the fiscal with revenue receipts significantly higher at 50.7% of the Budget estimates to stand at Rs 2,46,546 crore. Against this, total expenditure was Rs 3,68,902 crore.
The government needs to balance its spend and revenue generation as in all likelihood it will present an all-out investment budget for 2008-09. Even though there is the comforting factor of full coffers with tax revenues zooming on a close to 9% economic growth, expenditures continue to be a nagging worry.
The recent figures also raises a question mark over the government?s claims of reaching its deficit targets for the year. It has set a target of 1.5% of the GDP as revenue deficit for 2007-08 and has estimated fiscal deficit at 3.3% of the GDP from 3.5% the year before
In addition to the welfare schemes?it has announced a number of proposals, including a Rs 25,000-crore agriculture revival package, Rs 5,000-crore higher education plan and those for the government?s much-hyped ?inclusive growth??the government is spending heavily to compensate oil firms for selling cheap fuel, pay interest on market intervention bonds to offset the adverse impact of large and help exporters hit by a firm rupee.
