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Can Indian Farmers Reap Benefits From Government Subsidies Amid Inflation? -Subhash Chandra Garg

-TheQuint.in

After interest payments, food subsidies, fertiliser subsidy will be third largest single-budget govt expenditure.

With the Government seeking an additional appropriation of Rs 1.09 crore through the first supplementary in the current session, India’s fertiliser subsidy bill is set to exceed Rs 2.37 lakh crore this fiscal 2022-23.

Govt Expenditures Going Big on Fertiliser Subsidies

Excluding interest, pensions, and mandatory transfers to state governments, the revised budgetary discretionary expenditure is likely to be Rs 28 lakh crore; enhanced fertiliser subsidy will make up about 8.5% of the revised expenditure. Fertiliser subsidies cost the government only about one-fourth of this year’s expenditure (about Rs. 65-70,000 crore a year) until 2019.

This whirlwind increase in fertiliser subsidy bill is upsetting the fiscal applecart. It also raises several serious questions. Why has the fertiliser subsidy bill gone up so sharply, particularly this year? Will it remain elevated or come down? Is the government’s policy of absorbing increasing fertiliser costs in the best interest of the nation? Let's explore some of these questions.

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