Food subsidy may be hiked marginally
A Special Correspondent in New Delhi
The Bharatiya Janata Party-led coalition government at the Centre may hike subsidies on food and fertilisers marginally.
Sources said the allocation will be slightly higher than the interim Budget level despite pressure that the non-plan expenditure should be brought below the estimated Rs 2,005.27 billion. The figure, given in the interim Budget presented soon after the Atal Bihari Vajpayee government assumed office, represented a 15 per cent increase over the revised estimates for 1997-98.
The interim Budget did not increase the food subsidy, maintaining it at the revised Rs 75 billion level.
However, thanks to the increased pressure from the food ministry, Finance Minister Yashwant Sinha may increase the allocation for food subsidy marginally.
The reason given by the food ministry -- that the outgo in this sphere had gone up due to the increase in the wheat procurement price from Rs 475 to Rs 510 -- seems to have convinced the finance ministry.
Another source said the Centre may increase the issue price of wheat to neutralise this.
As for fertilisers, the government hopes that the subsidy will come down, thanks to the anticipated fall in imports due to improved domestic supply. The interim Budget had allocated Rs 87.03 billion for fertiliser subsidy -- Rs 76 billion for indigenous and Rs 11.03 billion for imported fertilisers.
However, the finance ministry may increase the ad hoc concessions given to the manufacturers of phosphatic and potassic fertilisers to check imports. Sources said the hike would be around Rs 800, in accordance with the recommendations of the Bureau of Industrial Cost Prices.
It is still not clear how the finance minister would give the nod to such a decision as it would have a bearing on the budgetary provisions.