Food subsidy outgo pegged at Rs 2.05 lakh cr for 2024-25: FM

The outgo towards food subsidy is pegged at Rs 2.05 lakh crore for 2024-25, down from Rs 2.12 lakh crore in the current fiscal, Finance Minister Nirmala Sitharaman said on Thursday. She also noted that the government estimates fertilizer subsidy for FY25 at Rs 1.64 lakh crore, down from Rs 1.89 lakh crore in the ongoing financial year.

Food subsidy is provided to meet the difference between the economic cost of foodgrains procured by the government and their sales realisation at the PDS rate called central issue price (CIP) under the National Food Security Act (NFSA) and other welfare schemes.

Similarly, the Centre provides fertiliser subsidies to manufacturers.

The government fixes the MRP of urea being sold in the market. The difference between the selling price and production cost is provided as a subsidy.

A nutrient-based subsidy is also being provided on non-urea fertilisers like DAP and MOP.

In petroleum, subsidies are mainly provided on LPG.

FY25 fiscal deficit target at 5.1% of GDP

The biggest takeaway from the Finance Minister Nirmala Sitharaman’s interim Budget announcement is the government’s fiscal consolidation program. While the current year’s fiscal deficit has been revised to 5.8% of GDP from 5.9% estimated earlier, the big surprise is next year’s target. Finance minister announced that the fiscal deficit target for FY25 was set at 5.1% of GDP.