Budget 2012: Little on the plate for food subsidy

In an indication that the government doesn’t see the National Food Security Bill rolling out in the current fiscal year, food subsidy was raised by a marginal Rs 2,177 crore for the year 2012-13 from the revised estimate of Rs 72,823 crore in the previous year.
The budgeted food subsidy last year was Rs 60,572 crore. While the revised allocation for this year too is expected to rise, the increase of about Rs 15,000 crore from the previous year’s budgeted provision suggests that UPA’s big ticket scheme is likely to roll out only in 2013-14 though the finance minister assured that he would fully support NFSA even as the government keeps the overall subsidy bill under 2% of GDP.
The push to reduce subsidies for kerosene and fertilizers leaves the FM with substantial headroom to increase food subsidy in the coming years with the current subsidy level at roughly 1.6% of GDP.
With the National Food Security Bill’s contours still pretty much an issue of fervent debate suggesting an additional subsidy burden of anything between Rs 20,000-45,000 crore, depending on the number of beneficiaries, the finance minister has created the mood for taxing the industry to feed the UPA’s pet scheme.
Budget 2012
Budget News 2012