New Delhi: The government aims to cut spending on food and fertiliser subsidies to Rs 3.7 lakh crore ($44.6 billion) in the fiscal year from April, down 26% from this year, two government officials said, to rein in a fiscal deficit that ballooned during the COVID-19 pandemic.
Food and fertiliser subsidies alone account for about one-eighth of total budget spending of Rs 39.45 lakh crore this fiscal year, but reductions in food subsidies in particular may prove politically sensitive with elections looming on the horizon.
The government expects to budget around Rs 2.3 lakh crore for food subsidies in the coming fiscal year, compared with Rs 2.7 lakh crore for the current year to March 31, the two officials said.
Spending on fertiliser subsidies will likely fall to about Rs 1.4 lakh crore, according to one of the officials and a third government official. That compares with nearly Rs 2.3 lakh crore this year, the third official added. The officials declined to be named because the information was not public.
The finance ministry declined to comment, while the food and fertiliser ministries did not immediately reply to requests for comment.
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