If fiscal jugglery was the buzzword for Finance Minister P Chidambaram in order to control fiscal deficit in the Interim Budget which he presented on Monday, rolling over the fuel subsidy to the next financial year was just an example of this tinkering.
Chidambaram said in his budget speech that for fuel subsidy, he has provided Rs 65,000 crore. “We have this year, absorbed the rollover of Rs 45,000 crore from the fourth quarter of 2012-13 and we will rollover only Rs 35,000 crore from the fourth quarter of this year into the next year,” he informed in the Budget speech. In other words, the Finance Ministry would not be paying subsidies worth Rs 35,000 crore to oil companies in the fourth quarter of the current fiscal, and this would have a positive impact on the fiscal deficit. The Pioneer had on December 26, 2013 given an indication towards this.
In all, he has provided Rs 65,000 crore towards fuel subsidy in 2014-15. The Government had given fuel retailers Rs 27,772 crore cash subsidy for selling diesel, cooking gas and kerosene below cost in the first nine months of 2013-14. The subsidy was Rs 16,000 crore short of the amount demanded by the Petroleum Ministry to cover for losses incurred on diesel and cooking fuel sales in the April-December period.
The Interim Budget also provides Rs 2,500 crore to fuel retailers for paying cash subsidy directly to cooking gas consumers. The scheme was put on hold last month. The revised estimate for petroleum subsidy for 2013-14 is Rs 85,480 crore against a budget estimate of Rs 65,000 crore. The revised estimate of the Central Plan Outlay of the Petroleum Ministry is Rs 107,406 crore (budget support Rs 15 crore and the remaining Rs 1,07,391 crore being generated by oil companies from their internal resources) for 2013-14 against the budget estimate of Rs 79,052 crore (budget support Rs 43 crore and IEBR Rs 79,009 crore).