Government Slashes Subsidy Outlay by 7.8% in 2024-25 Budget

The government has reduced its subsidy outlay for food, fertiliser, and fuel by 7.8% in the 2024-25 budget, to Rs 3,81,175 crore from the previous year's Rs 4,13,466 crore. The budget cuts aim to balance fiscal consolidation with welfare measures, benefiting approximately 80 crore people.

In a significant move reflecting fiscal prudence, the government has slashed its subsidy outlay for food, fertiliser, and fuel by 7.8 percent in the 2024-25 full budget presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Tuesday.

The total subsidy allocation for the current fiscal year is set at Rs 3,81,175 crore, a reduction from the previous year’s allocation of Rs 4,13,466 crore, aligning with the estimates projected in February’s interim budget.

Breaking down the allocations, the food subsidy is allocated Rs 2,05,250 crore, down from the revised estimates of Rs 2,12,332 crore. This subsidy benefits approximately 80 crore individuals under the National Food Security Act (NFSA) and other welfare schemes.

The fertiliser subsidy has been significantly reduced to Rs 1,64,000 crore for 2024-25, compared to Rs 1,88,894 crore earmarked previously. It supports manufacturers and keeps fertiliser prices affordable for farmers.

For petroleum subsidies, mainly for cooking gas (LPG), the allocation has been slightly reduced to Rs 11,925 crore, from Rs 12,240 crore in the 2023-24 estimates. The government’s decision to stick to the interim budget’s subsidy estimates reflects a careful effort to balance fiscal consolidation while maintaining essential welfare measures.