India Boosts Subsidy Budget Within Economic Constraints

India plans to raise its spending on food, fertiliser, and cooking gas subsidies by 8% to 4.1 trillion rupees ($47.41 billion) next fiscal year. This increase aims to address higher food and energy costs amidst slowing economic growth and increasing global uncertainties. Key subsidies are crucial for rural economic recovery.

India is preparing to increase its budget for subsidies on food, fertilisers, and cooking gas to 4.1 trillion rupees ($47.41 billion) for the next fiscal year, according to government insiders. This represents a modest 8% rise from the previous year to counteract surging food and energy costs.

The national budget, set to be unveiled by Finance Minister Nirmala Sitharaman, comes against a backdrop of decelerating growth in Asia's third-largest economy and escalating global economic uncertainties. The slowdown is primarily due to waning urban economic activity and corporate investments, while the rural economy, heavily reliant on subsidies, signals a tentative recovery.

The upcoming fiscal year's food subsidy bill is projected to climb by about 5% to almost 2.15 trillion rupees ($24.86 billion), driven by increased rice procurement and storage expenses. Subsidies account for approximately 8% of India's 557 billion dollar total annual spending, underscoring their importance in stabilising the economy.

(With inputs from agencies.)