Budget 2023-24: Subsidy schemes slashed by Rs 1,59,000 crore

There has been a big reduction in the money allocated to subsidy schemes in the Union Budget 2023-24. The budget of many subsidy schemes has also been abolished.

The government has cut the budget for food subsidy by Rs 89,844 crore to Rs 197,350 crore. In the revised budget estimate for 2022-23, the food subsidy was Rs 2,87,194 crore. That is, the budget for food subsidy has been cut by more than 31 per cent.

Similarly, subsidy on fertilisers has also been cut by Rs 50,121 crore. The government has earmarked Rs 1,75,099 crore for fertiliser subsidy in the 2023-24 Budget as against Rs 2,25,220 crore in the revised estimate of 2022-23.

The government provides nutrient-based subsidy on fertilisers and subsidy on urea. Nutrient-based subsidy has been reduced from to Rs 44,000 crore from Rs 71,122 crore (revised estimate 2022-23).

Urea subsidy has been reduced to Rs 1,31,099 crore from Rs 154,097 crore. Overall, the amount of these two subsidies has come down by 22 per cent.

LPG subsidy given to the poor has also been reduced by 75 per cent. The revised estimate for 2022-23 has been reduced to Rs 2,257 crore from Rs 9,170 crore, which means a steep cut of Rs 6,913 crore.

In addition to the subsidies given on food, fertiliser and petroleum products, the government also provides interest subsidy for 15 schemes. The budget of these interest subsidy schemes has also been cut by about Rs 10,000 crore.

In the revised estimate of 2022-23, an allocation of Rs 37,536 crore was made on these subsidy schemes, which has been increased to Rs 27,564 crore in the current budget. For example, the budget of CLSS-1 (Credit Linked Subsidy Scheme), a subsidy scheme for loan interest for economically weaker sections to buy a house, has been reduced from Rs 11,222 crore (revised estimate 2022-23) to just Rs 1 lakh.

Other subsidy schemes

In addition to the above schemes, there are 14 other subsidy schemes of the government, the budget of which has also been reduced to Rs 812 crore from Rs 2,958 crore (revised estimate 2022-23). There has been a direct cut of Rs 2,146 crore in the budget of these subsidy schemes.

For example, the budget for one such scheme ‘Procurement of Cotton by Cotton Corporation under Price Support Scheme’ has been reduced from to Rs 1 lakh from Rs 782 crore. Similarly, the budget of freight subsidy scheme has increased to Rs 50 crore from Rs 156 crore. One such scheme ‘Market Intervention Scheme in the Ministry of Agriculture and Price Support Scheme’ (MIS-PSS) has been reduced to Rs 1 lakh from Rs 1,500 crore.

Overall, the budget for all subsidy schemes has been fixed at Rs 4,03,084 crore, which is Rs 5,62,079 crore less than the previous year’s budget estimate of Rs 1,58,995 crore.

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