Govt may roll over Rs 33,000-35,000 crore in subsidy payments to FY20

Business Standard has learnt from senior government officials that the petroleum subsidy amount rolled over to FY20 will be around Rs 13,000 crore

Economy & Policy:

To help meet its revised fiscal deficit target of 3.4 per cent of gross domestic product for 2018-19, the Centre is highly likely to rollover as much as Rs 33,000-35,000 crore in combined food, petroleum and fertiliser subsidies to 2019-20. Additionally, Business Standard has learnt that the 2019-20 interim Budget assumed an average crude oil price of $65 a barrel for the next fiscal year, the same as this year.
If these sums are not rolled over, the fiscal deficit for this year could be as high as 3.55 per cent of gross domestic product (GDP). The combined fertiliser, food and petroleum subsidy budgeted estimate for FY19 is Rs 2.64 trillion, while the revised estimate is Rs 2.66 trillion. If the carrying forward to FY20 does not happen, the revised estimates for the major subsidies could actually cross Rs 3 trillion for the first time ever.
Business Standard has learnt from senior government officials that the petroleum subsidy amount rolled over to FY20 will be around Rs 13,000 crore. Food subsidy could see a rollover of around Rs 10,000 crore, while fertiliser subsidy rolled over to FY20 may be in the region of Rs 10,000-12,000 crore.

 “We are admitting that we will roll over Rs 13,000 crore in petroleum next year. This year we had budgeted the subsidies at $65 a barrel. It went to above $80 and then came down again, and hence the higher subsidy bills. For the next year also we have budgeted $65/barrel. The budgeted estimates for the next year is more than revised estimates this year because of rolled over payments,” said an official.

New rule will give surplus reserves of Sebi, pension regulator to govt

Economy & Policy:

The central government has decided to frame a rule that would mandate regulators and other autonomous bodies to transfer surplus funds to the exchequer, said two government sources privy to the development. The new guideline is expected to come in a month.

The move would make the Securities and Exchange Board of India (Sebi) and a dozen other regulators, such as the Insurance Regulatory and Development Authority of India (Irdai) and the Pension Fund Regulatory and Development Authority (PFRDA), to shell out a significant portion of their reserves into the Consolidated Fund of India. The Centre has been eyeing these resources that would help it reduce fiscal deficit. Experts, however, said this could infringe on the independence of the regulatory bodies.

We have asked Sebi to provide details of expenses they require for their internal operations. The rest of it would go to a public account and the government can allocate funds as and when required,” said a source cited above. According to him, a final consensus is required on the operational aspect of the surplus fund. This needs more deliberation.


 New rule will give surplus reserves of Sebi, pension regulator to govtSebi holds the highest surplus reserves, followed by Irdai, among autonomous bodies. So, the government is planning to first amend the Sebi Act; later, changes would be made to other Acts of the governing bodies...Read More