Starting fiscal 2017-18, the Centre’s food subsidy bill is set to go down by ₹25,000 crore annually, thanks to the Direct Benefit Transfer arrangement.
For 2015-16, the Centre’s food subsidy bill is estimated at ₹124,419 crore against ₹122,676 crore in 2014-15. However, the food subsidy bill could be higher still this fiscal with more States rolling out the National Food Security Act.
The Centre’s overall subsidy bill is also expected to dip further with the planned extension of the DBT plan to kerosene sold through the public distribution system to more States.
Kerosene DBT is expected to plug the leakage of 14 lakh kilolitres once the scheme goes pan-India, said a senior government official.
State governments are expected to automate all the 5.4 lakh fair price shops by March 2016 and install Point of Sale machines for distribution of subsidised foodgrains. “This will be a massive step for systematic identification of beneficiaries and cutting down on leakages. We expect that this will lead to savings of up to ₹25,000 crore annually in the food subsidy bill,” said the official.
The government plans to start DBT for kerosene subsidy from April 1 in 26 districts across Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Punjab and Rajasthan.
“It is difficult to give the exact figure but the exercise will weed out fake beneficiaries and end duplication and we expect savings of at least 14 lakh kilolitres of the fuel given the consumption trends for this fiscal,” said the official, adding that more States are likely to join up over the course of the year.
The Centre has allocated 86.85 lakh kilolitres of subsidised PDS kerosene to States for 2015-16 of which about 71 lakh kilolitres are expected to be distributed. The subsidy outgo for kerosene in 2014-15 was about ₹24,799 crore.
Minister of State (Independent charge) for Petroleum and Natural Gas, Dharmendra Pradhan had on Wednesday said that soon kerosene consumers in these districts will receive the subsidy directly in their bank accounts.