Budget 2019: Sharp spike in subsidies in April; urea subsidies jump by 500%, petroleum by this much

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Published: June 14, 2019 9:06:26 PM

Union Budget 2019-20: Finance Minister Nirmala Sitharaman will face the challenge of containing the subsidy bill in her maiden budget.

Union Budget 2019, Subsidy, Petroleum Subsidy, Fertiliser SubsidyFinance Minister Nirmala Sitharaman.

India Union Budget 2019: When finance minister Nirmala Sitharaman will rise to present her maiden budget on July 5, one of the major challenge before her will be to contain the government’s increasing subsidy bill. The Union government gives subsidy bill on three major heads – food, fertiliser and petroleum products. It’s subsidy bill on these three items was nearly Rs 3 lakh crore last year. However, according to the revised estimates, the total bill on the subsidies has gone up by nearly Rs 3,843 crore. The situation is going to be even worse as according to the latest official data, fertiliser and petroleum subsidies have registered a sharp spike in the first month of the current financial year.

According to the latest government data, the government had spent total Rs 68,974 crore in subsidies in April, which is just 1% more in terms of percentage for the same period last year. However, two subsidies: petroleum and fertiliser have registered a sharp spike during this period.

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In the interim budget, the Union government has allocated Rs 50,154 crore for urea subsidies. However, the government spent Rs 11,538 crore in the first month of this year itself, that is over 23% of the total budget for the entire fiscal. This is highly unusual as it is 600% of the amount spent by it during the same period last month. Union government had spent just Rs 1,836 crore in April last year on urea subsidies.

Similarly, subsidies on petroleum products have also registered a sharp spike in April. The government had allocated Rs 37,478 crore for petroleum subsidies in this year’s budget. However, it has spent Rs 5,168 crore or 14% in the first month itself. The amount spent by the government on petroleum subsidies in April this year is more than double of the amount spent by it on the same head during the same month last year.

According to the revised estimates, the Union government’s subsidy bill has already gone up by Rs 3,843 crore from its budget estimates and if the early trends of this fiscal are any indicator then this year its overall subsidy bill is expected to register a steep rise.

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