The government subsidy bill in the current fiscal is likely to go up by a massive Rs 1 lakh crore on account of higher outlays towards fertiliser, food and oil, Finance Minister Pranab Mukherjee said on Wednesday.
"Fertiliser 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 crore," he said in Lok Sabha while replying to a debate on second batch of Supplementary Demands for Grants.
In the Budget, the government had earmarked Rs 1.34 lakh crore towards major subsidies like
fertilizer, food and
oil.
The Lok Sabha later approved the Supplementary Grants envisaging an additional outlay of Rs 56,800 crore in 2011-12.
He also said that the under recoveries of oil marketing companies are likely to be Rs 1.32 lakh crore during 2011-12.
For every 14 kg LPG cylinder, he said the government provides a subsidy of Rs 260 and "...there is no carpet under which you can sweep it. You have to divert substantial part of your income from other areas to meet the subsidies bill".
With the subsidy going up by additional Rs one lakh crore, the Minister said that it will affect investments.
"This is the problem which we will have to collectively address," Mukherjee said while indicating that the
fiscal deficit during the financial year would be in the range of 4-5 per cent of the GDP.
Attributing a part of increase in subsidy bill to high global oil prices, he said the average price of India oil basket is $110 dollar a barrel as against $90 dollar at the time of presentation of the Budget in February this year.
The government had earlier sought an additional Rs 9,000 crore and now Rs 56,800 crore as Second Supplementary Demand for Grants.
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