New Delhi: Ahead of Budget 2022-23, the government is looking for ways to reduce its subsidy bill in 2022-23. The food subsidy is expected to be pegged at Rs 2.60 lakh crore and the fertiliser subsidy might be pegged at Rs 90,000 crore, according to a report by Times Now. The subsidy bill for the current fiscal may be somewhere between Rs 5.35 lakh crore and Rs 5.45 lakh crore, according to an earlier report by The Economic Times.Also Read – LIC IPO: Timeline, Numbers May Be Revealed In Budget 2022
The report further said that the fiscal deficit target of the government in the next fiscal may be at 6.5 per cent, down from 6.8 per cent in the current year. The government announced the commencement of the Budget Session 2022 on January 23, 2022. The budget will be presented on Tuesday, February 1, 2022, by Finance Minister Nirmala Sitharaman. Also Read – Budget Could Consider Levying TDS/TCS On Crypto Trading, Make It Reportable in SFT
PMGKAY Main Reason
According to the report, the food subsidy for the current year is expected to be around Rs 3.90 lakh crore, less than the bill of the previous year at Rs 4.22 lakh crore. However, it will be more than the target of Rs 2.43 lakh crore. The main reason for the rise in the expenditure is the free distribution of food and grains under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) amidst the Covid-19 pandemic. Also Read – Parliament’s Budget Session To Begin On January 31, Union Budget To Be Tabled On February 1 | All You Need To Know
The cost of PMGKAY alone in FY22 is expected to be Rs 1.47 lakh crore. The fertilizer subsidy bill is expected to be twice the budgeted amount of Rs 79,530 crore. The supply-side disruptions led to a rise in the prices of fertilizers, pushing the government to allocate more money towards the same.
LIC IPO May Help
However, the government is trying to narrow the gap via its disinvestment plan. So far, the government has been able to raise Rs 9,330 crore through selling its stakes in PSUs. But the LIC IPO, expected to be launched by the ending of March 2022, will help the government in a big way by raising over Rs 1 lakh crore. The total disinvestment target of the government is Rs 1.75 lakh crore for the current fiscal.
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