Meals subsidy accounts for over 50% of whole Govt subsidy thus far in FY25, ETCFO
The meals subsidy has been the most important element of the federal government’s whole subsidy expenditure thus far within the monetary yr 2024-25, accounting for greater than 50 per cent of the overall quantity disbursed.
Based on a report by Financial institution of Baroda, the federal government spent Rs 3.07 lakh crore on subsidies throughout the first 9 months of the monetary yr (April-December 2024). That is increased than the Rs 2.77 lakh crore spent in the identical interval final yr however stays decrease than the Rs 3.51 lakh crore spent in April-December 2022.
A significant motive for this improve is the rise in meals subsidy spending. The federal government allotted Rs 1.64 lakh crore for meals subsidies throughout April-December 2024, which is increased than the Rs 1.34 lakh crore spent in the identical interval final yr. Nevertheless, it’s barely beneath the Rs 1.68 lakh crore recorded in April-December 2022.
Whereas meals subsidies elevated, the expenditure on fertilizer subsidies has declined barely. Between April and December 2024, the federal government spent Rs 1.36 lakh crore on fertilizer subsidies, in comparison with Rs 1.41 lakh crore within the earlier yr and Rs 1.81 lakh crore in April-December 2022.
The report additionally highlighted a decline within the authorities’s non-debt capital receipts, which embody income from asset gross sales and disinvestments.
These receipts stood at Rs 27,296 crore as of December 2024, decrease than Rs 29,650 crore in December 2023 and considerably beneath Rs 55,107 crore in December 2022. This means weaker income assortment and lowered success in producing funds via non-debt sources.
Moreover, the report additionally highlighted that the International Direct Funding (FDI) inflows into India have weakened. In November 2024, FDI inflows stood at USD 2.4 billion, a pointy decline from USD 4.3 billion recorded in October 2024. The report additionally famous a rise in overseas investor outflows from the Indian inventory markets, including stress on total inflows into the nation.
