Budget 2022 | Farm Subsidies FM Sitharaman's Big Challenge
The NDA government has been steadily slashing allotments for food and fertilizer subsidies. In 2014-15 it allocated 11.35% of the Union Budget for these subsidies but by 2020-21 the total allocation had been reduced to 6.14%. In 2020-21 the government increased its subsidy bill by almost 200% to battle the Pandemic hit economy. The two subsidies were allotted Rs 5.56 lakh Cr in the revised estimates of the budget which was more than 16% of the total Budget allocations. But the next year in 2021-22 it cut down the subsidy bill by 42% to Rs 3.22 lakh Cr for which the revised estimates will be presented in the next Budget on February 1.
The dilemma N. Sitharaman faces now is to either cut down the subsidy bill further to balance her books and earn the wrath of the farmers emboldened by a recent victory or face a bigger deficit in the budget at a time when the economy is not out of the woods. Both are tough choices. Especially when in the two large states - Punjab and Uttar Pradesh – Minimum Support Price and Food and Fertilizer subsidies are huge election issues.
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