The subsidy bill of the Central Government has remained in the range of Rs. 2.50 lakh crore to Rs. 2.58 lakh crore during the period, 2012-13 to 2015-16 (budget estimates).
The food subsidy has been increased from Rs 85,000 in 2012-13 to Rs 139,419 crore in 2015-16 (Budget Estimates) as a result of implementing National Food Security Act. It was Rs 92,000 crore in 2013-14 and Rs 117,671 crore in 2014-15. Similarly, the fertiliser subsidy has also slightly increased during the period. It was Rs 65,613 crore in 2012-13, Rs 67,339 crore in 2013-14, Rs 71,076 crore in 2014-15 and Rs 72,438 crore in 2015-16 (budget estimates).
However, due to the falling crude prices, the petroleum subsidy has been declining over the years which have eased the finance minister in keeping the fiscal deficit under control. The fiscal deficit of the Central Government, which is the difference between total expenditure and non-debt receipts, has been in the range of Rs 5.11 lakh crore in 2014-15 and Rs 5.35 lakh crore 2015-16.
In 2012-13, the petroleum subsidy was Rs 96,880 crore which fell to Rs 85,378 crore in Rs 2013-14, Rs 60,269 crore in 2014-15 and Rs 30,000 crore in 2015-16 (budget estimates).
To put a check on the leakage of subsidies, the Government of India has started Direct Benefit Transfer (DBT) scheme in January 1, 2013 and expanded across all Central Sector/Centrally Sponsored Schemes involving cash transfers to individual beneficiaries in February 2015. In cash transfer, the benefit is transferred in the beneficiary’s account, preferably Aadhaar seeded. Presently, LPG subsidy is transferred directly in to the bank accounts of beneficiaries. Food subsidy in cash is disbursed in two Union Territories, Puducherry and Chandigarh directly to beneficiaries’ bank accounts, in kind, after biometric authentication, in 70,000 fair price shops at present. The Union Budget 2016-17 has indicated the introduction of DBT on pilot basis for fertiliser in a few districts across the country. Hence, it is difficult to indicate a time frame for completing the shift to the system of cash transfer.