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Budget 2016: Food subsidy bill for the current fiscal may exceed the Budget estimate of Rs 1.24 lakh crore by Rs 10,000-20,000 crore thereby posing a threat to the government's efforts to rein in the expenditure on subsidies. Also, the allocation for 2016-17 could be more than Rs 1.5 lakh crore, according to sources privy to the Budget 2016 discussions. A pan- India roll-out of the National Food Security Act will take the food subsidy to new highs. Here is all you need to know in 5 points:
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1. Budget 2016: The food subsidy bill this year is set to be higher than the budgeted level even as the arrears to the tune of Rs 70,000 crore to the Food Corporation of India could be left unpaid by March-end.
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2. Budget 2016: Three major subsidies — food, fertiliser and fuel — account for 96% of the Centre's total subsidy expenditure. For FY16, the three subsidies are estimated to be Rs 2.27 lakh crore, down from Rs 2.54 lakh crore in FY15.
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3. Budget 2016: The Budget estimate on subsidies could be revised upwards by around Rs 25,000 crore even as subsidy on petroleum would be contained at close to the budgeted level of Rs 30,000 crore. The fertiliser subsidy would be Rs 6,000-7,000 crore higher than the budgeted Rs 73,000 crore owing to arrears cleared.
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4. Budget 2016: FCI had approached the finance minister to provide Rs 20,000 crore as supplementary grant or as part of revised estimate under the food subsidy budget to meet the expenses in the last quarter of the current fiscal. But North Block provided FCI with only Rs 10,000 crore as ways and means advance.
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5. Budget 2016: Sources said FCI, the biggest recipient of food subsidy, has asked for an allocation of Rs 1.35 lakh crore from the finance ministry for 2016-17 while Madhya Pradesh, Chhattisgarh and Odisha, which undertake decentralised foodgrain procurement, have asked for Rs 25,000 crore. In the current fiscal, out of the budgeted food subsidy of Rs 1.24 lakh crore, FCI was allocated Rs 97,000 crore.
