Finance Secretary TV Somnathan on Wednesday said that the revision in food subsidy number reflects payment of past dues and not a real reduction. In an interview with businessline, he said that the subsidy number for fertiliser reflects a lower import price.
“Food subsidy reduction is largely because there were certain arrears to be paid to States for old procurements which were paid last year. Otherwise, there is a firm sort of basic level which continues so that it’s not a reduction,” he said. Further, he explained that there were certain adjustments of past procurement dues for which states had given late claims. The claims date back to many years. They have to be audited before they are paid. There was a backlog of claims in the last financial year in March. “So, you see a slightly higher number in last year’s actuals. It is not much of a change,” he said.
On the issue of fertiliser subsidy, he said that the government has to make assumptions. “We have made certain assumptions that they will be broadly at current levels,” he said. Also, he said there is no assumption about fuel price level for calculating various numbers as there is no subsidy on fuel. “Our excise duties are fixed duties or specific duties, they’re not ad valorem,” he said.