Direct transfers to slash subsidies by up to 60%: FM
With the promise that the subsidy on diesel, which accounts for 60% of the total fuel subsidy bill, will be phased out in two years, the targeted savings on account of DBT in other subsidies would indeed come handy for the Centre in its difficult-looking fiscal consolidation plan.
From the start of this month, the Aadhaar-enabled DBT has been under implementation in 20 districts of the country for disbursal of various doles/entitlements like old-age and widow pension schemes, student scholarships and payments under the employment guarantee scheme.
Subsidies including the three explicit ones on food, fertiliser and fuel will also be distributed to the beneficiaries through this route in coming months. Subsidies this fiscal are budgeted to be R1.9 lakh crore or 12.75% of the Budget, whereas the claims, inclusive of carryovers from last year, would be much higher, Chidambaram said.
“Building on the expected 5.3% fiscal deficit for FY13, a 4.8% deficit target is possible in FY14 if the government commits to diesel price deregulation, higher revenues via better tax administration, fertiliser subsidy