India’s food subsidy bill cut by 22%, fertiliser 31%

The Narendra Modi government on Wednesday slashed its fertiliser and food subsidies by 22% and 31% each for the upcoming fiscal.

India’s expenditure on overall subsidy and subsidy-related schemes has seen a cut of around 28% at Rs 4.03 lakh crore. While the Centre had estimated an expenditure of Rs 3.56 lakh crore, it has ballooned to Rs 5.62 lakh crore, a rise of nearly 58%.

Finance Minister Nirmala Sitharaman announced during her Union Budget speech that subsidy on food has been cut to Rs 1.97 lakh crore from Rs 2.87 lakh crore incurred in the previous fiscal.


The Centre had originally estimated a food subsidy bill of Rs 2.06 lakh crore.

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However, the expenditure on food subsidies saw a steep rise owing to the free food programme of the BJP government which was aimed at easing the economic devastation caused by the Covid-19 pandemic.

It was discontinued in 2022 and replaced with the new initiative that will also give out free grains while lowering the quantity.

Nearly nine states are set to head to the polls this year while general elections are due in 2024.

India’s fertiliser subsidy has also been slashed, with Rs 1.75 lakh crore estimated for FY24, down from Rs 2.25 lakh crore incurred in FY23.

The Centre had originally pencilled in an estimated fertiliser subsidy of Rs 1.05 lakh crore.

In comparison with FY22, India’s fertiliser subsidy bill rose nearly 47%.

The reduction in fertiliser subsidies is likely driven by the expectations of lower crude oil prices and the government's revised gas procurement policy for fertiliser companies, which came into effect earlier this month.