Budget 2019: In the interim budget, the Narendra Modi government has estimated its subsidy bill for 2019-20 to be at around Rs 3 lakh crore. However, a big part of these subsidies is front-loaded, which means they are allocated in the first month itself as these subsidies are considered crucial for implementing the government’s social welfare agenda. The government’s expenditure on subsidies in the month of April accounts for more than one-fourth of its total expenditure on subsidies.
As per the latest official data, the Modi government spent Rs 2.57 lakh crore in the month of April, a big part of it, nearly 62% or Rs 1.59 lakh crore was arranged through borrowings and raising loans. And subsidies on major heads like food, fertiliser and petroleum account for Rs 69,000 crore or 27% of the total expenditure of Rs 2.57 lakh crore in the first month of this fiscal.
Though the government has projected in Budget 2019 that its total subsidy bill in 2019-20 will be around Rs 2.97 lakh crore, its expenditure on subsidies in the first month was around Rs 69,000 crore, 23% of the annual estimate. Food subsidies account for the biggest chunk of government’s bill on major subsidies, around 62% of the total annual subsidy bill.
The government has pegged that it will need over Rs 1.84 lakh crore to implement food security law in 2019-20. However, a big part of this subsidy is front-loaded as more than one-fourth expenditure on the food subsidy has been provided in the first month of this fiscal. This year the government has already spent Rs 46,862 crore on food subsidy in April, followed by subsidies on urea Rs 11,538 crore, nutrient-based fertiliser subsidies Rs 5,405 crore and petroleum subsidies Rs 5,168 crore.
The government will spend Rs 2.97 lakh crore on three major subsidies this year: food subsidy Rs 1.84 lakh crore, fertiliser subsidies Rs 75,000 crore and petroleum Rs 37,500 crore.