Leakages can be curbed if the subsidy is given directly to the beneficiaries using ‘direct benefit transfer’ mode. The potential for reducing food subsidies is immense
In the full Budget presented by Union Finance Minister Nirmala Sitharaman on July 23, 2024, the government has pegged the budget estimate (BE) food subsidy for FY 2024-25 at Rs 205,250 crore which is no different from the estimate given in the interim Budget. Though slightly lower than the revised estimate (RE) of Rs 211,394 crores for FY 2023-24, this is no consolation as invariably, the RE for any financial year turns out to be higher than the BE. For instance, while presenting the budget for FY 2023-24, Sitharaman kept the BE for food subsidy at Rs 197,000 crore. Against this, RE has turned out to be Rs 14,394 crore more. The moot point is that the expenditure incurred by the Central government during the last five years under this head has been consistently over Rs 200,000 crore mark every year 2020-21: Rs 529,000 crore; 2021-22: Rs 372,000 crore