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Subsidy bill likely to overshoot forecasts by Rs 1 lakh crore in 2011-12: FM

08 Dec 2011 Evaluate

Amid the ongoing turbulent times for the Indian economy, Union Finance Minister Pranab Mukherjee opined that the government’s subsidy bill in the 2011-12 fiscal is expected to exceed estimates by a whopping Rs 1 lakh crore on account of higher outlays towards fertilizer, food and oil, highlighting the fact that the situation is far from improving any time soon. The government had allocated Rs 1.34 lakh crore towards major subsidies in its budget 2011.

The finance minister told in Lok Sabha that 'fertilizer subsidy is going to be Rs 90,000 crore as against the projected Rs 40,000 crore... similarly, food subsidies will also increase. The net increment would be roughly about not less than Rs 80,000 crore. It may be Rs 1 lakh core.'  He further stated that the under recoveries of PSU oil marketing companies could come around Rs 1.32 lakh crore during 2011-12. This disproportional swelling of subsidy bill which has overshot around 70% of the budgeted estimates is likely to amplify the fiscal deficit to as much as 5.7% of GDP.

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