Government expects subsidy outgo to be below 2 per cent of GDP this fiscal
23 Nov 2012
The government has targeted to limit its total expenditure on subsidies to below 2 per cent of the country's gross domestic product (GDP), against 2.4 per cent in 2011-12, and further to 1.75 per cent of GDP over the next three years.
This could be achieved by improving the quality of public spending and curbing subsidy in some cases as in the case of LPG and diesel, minister of state for finance Namo Narain Meena informed the Lok Sabha in a written reply today.
The government spent an estimated Rs141,351 crore on subsidies in the financial year 2009-10, and about Rs173,420 crore in 2010-11. For the 2011-12 financial year the government's total subsidy burden is estimated to have grown to Rs216,297 crore – 2.4 per cent of the country's gross domestic product - up from 2.2 per cent and 2.3 per cent, respectively, in 2009-10 and 2010-11.
For the current fiscal (2012-13) the government has budgeted Rs190,015 crore in subsidy outgo, which is about 1.9 per cent of the estimated GDP of Rs101,59,884 crore.
While the government's subsidy burden on food is expected to rise to Rs78,000 crore (budgeted) in 2012-13, from Rs72,823 crore in 2011-12, Rs63,844 crore in 2010-11 and Rs58,443 crore in 2009-10, the subsidy outgo on fertiliser is expected to fall to Rs60,974 crore in the current fiscal from Rs67,199 crore in 2011-12, Rs62,301 crore in 2010-11 and Rs61,264 crore in 2009-10.
The subsidy outgo on petroleum products is also expected to decline to Rs43,580 crore in the current fiscal from Rs68,481 crore in 2011-12, although much higher compared to Rs38,371 crore in 2010-11 and Rs14,951 in 2009-10.
India's GDP has steadily grown from Rs64,57,352 crore in 2009-10 to Rs76,74,148 crore in 2010-11 and further to Rs89,12,179 crore in 2011-12. It is expected to rise to Rs101,59,884 crore in the 2012-13 financial year, she added.
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