Govt ready for bigger subsidy outgo, says FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said the Centre had anticipated higher subsidies while preparing the budget, seeking to allay any concerns on the fiscal math.

In a clear message on Atmanirbhar Bharat at The Economic Times Awards for Corporate Excellence, the minister said reinforcing "atmanirbharta (self-reliance)" and the principle that the Indian economy had to be strengthened governed the policy on levying customs duties. The government does not want a product coming into the country at a price lower than that at which it is locally produced at comparable quality.

The finance minister, winner of the ET Award for Business Reformer of the year, said the Centre will extend the foodgrains assistance programme until the government is confident of the economic recovery taking hold, adding that this need had been anticipated.


"We were conscious that even this year we may have to give bigger numbers for fertiliser subsidy because the intention is not to move it on or burden the farmers with it, so to an extent we were prepared for an additional allocation both for the (Pradhan Mantri Garib Kalyan) Anna Yojana and also for fertilisers," Sitharaman said.

The Centre had budgeted ₹1.05 lakh crore for the fertiliser subsidy. However, global rating agency Crisil has said the outgo toward this could touch an all-time high of ₹1.65 lakh crore on account of the Ukraine crisis, which has led to a steep increase in urea and fertiliser prices.

The Centre has already approved additional support of ₹60,939 crore for subsidies on non-urea fertilisers for the upcoming kharif crop. The extension of the food programme until September is expected to cost an extra ₹80,851 crore.




Experts have expressed concern that this could upset budget calculations. However, the finance minister said that all this had been anticipated.

She asserted that the US and European countries have understood that India's Atmanirbhar Bharat policy had not shut the door on imports and that the Indian economy had become the next best destination for investment.

Sitharaman said that the world is appreciative of the fact that the government continued with reforms even during the pandemic and that no one was thinking of Atmanirbhar Bharat as an inward-looking policy.

"There is a clear understanding that atmanirbharta did not shut doors, we are actually trying to strengthen ourselves," she said.

She added that this along with the production linked incentive (PLI) scheme will help India emerge as the next global manufacturing hub.

"There is a clear recognition both in Germany and also in the various meetings that I had in the United States that India's economy now has become the next best where investments are happening," Sitharaman said.