By Sarita Chaganti Singh and Mayank Bhardwaj
New Delhi (Reuters)-India is likely to increase the expenditure for food, fertilizer and cooking gas subsidies to 4.1 trillion rupees ($ 47.41 billion) in the next tax year, said government sources, a moderate 8% on annual basis to cover higher food – and energy costs.
Minister of Indian Finance Nirmala Sitharaman will present the National Budget on 1 February, in the midst of delaying growth in the third largest economy of Asia and the rising global uncertainties.
The last economic delay is largely attributed to weakness in urban regions and investments of companies. The rural economy where a large part of the large subsidies is used shows signs of recovery and supporting subsidies will be an important support.
The government has estimated its Food Subsidy invoice to rise by around 5% for the next tax year that starts from 1 April to almost 2.15 trillion rupees ($ 24.86 billion), one of the sources said.
Higher driving purchases of farmers and rising storage costs are expected to go up next year’s food subsidy, the source said.
The budgeted edition for food subsidies in the current financial year ending on March 31 is 2.05 trillion rupees ($ 23.70 billion).
Subsidies, including food, fuel and fertilizers, accounted for around 8% of the total annual spending of the country of $ 557 billion before the current financial year.
The government is also expected to assign nearly 250 billion rupees ($ 2.89 billion) for subsidies for cooking gas, said the second source, an increase of 119 billion rupees ($ 1.38 billion) in the current tax year.
The fertilizer subsidy for the following financial year is likely to be retained at the level of 1.7 trillion rupees of the current year ($ 19.66 billion), a third source said.
The Ministries of the Financial, Food and Fertilizers of India did not immediately respond to individual e -mails that were commenting on the subsidies.
($ 1 = 86.51 rupees)
