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Aiming to bring down the fiscal deficit, Finance Minister P Chidambaram today sought to reduce major subsidies on fuel, food and fertilisers by 11 per cent to over Rs 2.20 lakh crore in 2013-14 fiscal compared to the revised estimates for the current fiscal.
According to the Budget proposals, the government's subsidy bill on food, petroleum and fertilisers is estimated at Rs 2,20,971.50 crore for the 2013-14 fiscal as against Rs 2,47,854 crore in the revised estimates for this fiscal.
Interestingly, the revised estimates for this fiscal are higher by 38 per cent compared to the budget estimate of Rs 1,79,554 crore.
"The fiscal deficit for 2012-13 has been contained at 5.2 per cent. I propose to bring it down to 4.8 per cent by 2013-14," Chidambaram said while unveiling the Budget 2013-14 proposals in the Lok Sabha.
The oil subsidies, which is given to the state-run oil marketing firms such as Indian Oil Corp, BPCL and HPCL, for selling diesel, domestic LPG to households and kerosene through the PDS system, below cost, is estimated lower at Rs 65,000 crore for next fiscal against the revised estimate (RE) of Rs 96,880 crore in 2013-13 fiscal.
"Decrease is mainly due to less requirement for compensation to oil companies for under recoveries," said the budget document.
The food subsidy given to run the public distribution system is estimated to rise to Rs 90,000 crore next fiscal from the RE of Rs 85,000 crore in 2012-13.
"Increase (food subsidy) is mainly towards provision for National Food Security," the document said on food subsidy, which is to meet the difference between the economic cost of foodgrains and their sales realisation at the Central Issue Price fixed under the public distribution system (PDS) and other welfare schemes.
The fertiliser subsidy is also pegged slightly lower at Rs 65,971.50 crore in the next fiscal, as against the RE of Rs 65,974 crore in 2012-13 fiscal.
Under the fertiliser subsidy, the government would provide Rs 15,544.44 crore for imported urea, Rs 21,000 crore for indigenous (urea) fertilisers, and Rs 29426.86 crore for the sale of decontrolled fertilisers (DAP, MOP and complexes) at a subsidised rate to farmers.