Budget 2024: A Look At How PM Modi Govt Subsidy Bill Has Changed Over Two Terms

Modi Government

The Narendra Modi governments approach to subsidies has seen significant changes over its two terms, marked by both reductions and increases in specific areas.

Between 2013-14 and 2018-19

The central governments spending on major subsidies (food, fertilizer, fuel) decreased from Rs 244,717 crore to Rs 196,769 crore.

As a percentage of GDP

This subsidy bill more than halved, going from nearly 2.2% to just over 1%.

Fuel Subsidies

Reduced significantly with falling global oil prices. Subsidies limited to LPG cylinders and connections for low-income households. Diesel and petrol became revenue sources for the government.

Food Subsidies

Targeted delivery through Aadhaar-linked schemes like Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Reduction in leakages and improved efficiency.

Fertilizer Subsidies

Increased due to the governments decision not to pass on higher costs to farmers. Subsidy nearly doubled from Rs 127,922 crore to Rs 251,339 crore between 2020-21 and 2022-23. Urea price capped since 2012, with a small increase for neem-coated variety.

New Welfarism

The government introduced new welfare scheme funded by savings from reduced fuel subsidies. Targeting and direct benefit transfers remain a focus for various subsidy programs.