As the economy recovers from pandemic-led challenges, the government is allocating lower money to overall subsidies
Even with one eye on the general elections in a few months from now, the interim Budget stayed away from adding more sops in the kitty. There was an expectation to push rural consumption as farm output faces challenges like poor weather conditions, fallout of climate change and steep inflationary pressures. In contrast, the total subsidy bill is projected to get lower in the financial year 2025, show interim Budget estimates.
Major subsidies which include food, fertiliser, and petroleum are top contributors to revenue expenditures. Overall, subsidy allocation is budgeted to be lower by 7 percent in FY25 aided by moderation in fertiliser subsidy. Outlay towards subsidy is budgeted to moderate to 1.2 percent of GDP in FY25 nearing close to the pre-pandemic levels.