The government’s oil subsidy burden has already exceeded Rs 460 billion — almost 84 per cent higher than the budgeted estimate of Rs 250 billion for the whole financial year, Business Standard has learnt.
“By the end of September, the subsidy burden on cooking gas increased to over Rs 390 billion and that of kerosene to Rs 70 billion,” said a senior official. In FY18, the subsidy for cooking gas was Rs 208.8 billion and that for kerosene was Rs 46.72 billion.
The government has recently cut Rs 1.5 per litre on excise duty of petrol and diesel, which will lead it to loss of Rs 10.5 billion in revenues for October-March. The government will bear around Rs 61 billion of that hit, with states bearing the rest, since 42 per cent of the proceeds from duties are passed on to them. The big subsidy bill will add to the government’s fiscal deficit woes. Of the revenue and expenditure data available, while the direct tax data is encouraging, other indicators show that the government could face a shortfall of more than Rs 1 trillion in its share of goods and service tax, and could see additional expenditures of Rs 465 billion, if one includes the latest oil subsidy figures. Read more