Budget 2019: Subsidies are handouts given by the government either in the form of cash incentives or tax reductions. By taking the onus of payments on itself, the government gives a boost to individuals or businesses and helps them in their financial endeavours. Let’s have a look at the subsidies announced in the following sectors in the last few budgets.
Food
The food subsidy bill borne by the government has consistently risen since budget 2014. While food subsidy was at Rs 1.15 lakh crore in budget 2014, it swelled to Rs 1.69 lakh crore in budget 2018, marking an increase of about 47%. At the same time, what is to be noted is that the revised subsidy estimates — have played spoilsport in several years, often exceeding the initial budget allocations.
In budget 2014, the revised budget estimate exceeded the initial allocation by 6% to reach Rs 1.23 lakh crore. In the next year, in budget 2015, the revised estimate figures increased by 12% from the initial allocation. This trend of overshooting initial allocation was somewhat subdued for budget 2016 where the revised allocation exceeded the original by less than 1%. In budget 2017, however, the revised estimate of Rs 1.40 lakh crore was lower than the original allocation of Rs 1.45 lakh crore.
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Fertilisers
The government has nearly doubled its subsidy allocation for fertilisers between 2014 and 2018. Where the subsidy allocation in budget 2014 was Rs 36,970 crore, the subsidy announced in budget 2018 was Rs 70,090 crore. But unlike food, the fertiliser subsidies have been well laid out, and haven’t overshot the initial allocation. In fact, in most years, the revised estimates for fertiliser subsidies have come in lower than the original budget estimates.
Fertiliser subsidies were estimated at about 12% lower under revised estimates, against that in the budget estimates of budget 2014. For the next two consecutive years in the budget 2015 and budget 2016, fertiliser subsidies remained more or less the same in both budget estimates and revised estimates. The following year there was again a fall in the revised estimates of fertiliser subsidies by about 8% than the budget estimates of budget 2017.
Petroleum
The subsidies in the petroleum sector are given in two categories: LPG and kerosene. LPG subsidy exceeds that for kerosene. While LPG subsidy in budget 2018 was Rs 20,377 crore, the subsidy for kerosene was Rs 4,555 crore. In LPG, the revised estimate has fallen short of the initial allocation since budget 2015 but again the difference is minimal — except in the year 2016. In budget 2016, the revised estimate of Rs 18,678 crore was 16% less than the initial allocation of Rs 21,802 crore.
However, for kerosene, budget 2016 saw an increased revised estimate of Rs 8,853 crore vis-a-vis the initial allocation of Rs 7,197 crore. In both, budget 2015 and budget 2017, the revised estimate were less than the initial allocation but the difference was less than 1% for both.