Elections 2024: Government to spend more on food, fertilizer subsidies, MGNREGA says report

Elections 2024: In the run up to elections in 2024, the government is planning to spend more on food, fertilizer subsidies and rural job gurantee schemes, reported Moneycontrol. As per the report, the pace of expenditure will pick up in the second half of the current financial year, putting the Centre on track to meet the fiscal deficit target for FY24.

Budget

The centre in the current fiscal year is likely to allocate Rs 1.97 lakh crore for food subsidy, Rs 1.75 lakh crore for fertiliser subsidy and the allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is Rs 60,000 crore for 2023-24. The allocation for MGNREGA is however a steep cut from last year's outlay of Rs 89,400 crore.

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The report quoted a senior government official and said that the Centre's decision to extend the free food grain plan will have a limited impact on the fiscal deficit for FY24. He further added that the additional spending due to the three-month extension is to the tune of Rs 15,000 crore.

The report that quoted a senior government official mentioned that despite the additional spending on subsidies, the government is confident of meeting the fiscal deficit target of 5.9% of gross domestic product (GDP) for 2023-24.

“No deviation is expected on the fiscal deficit as the impact of higher subsidies is only for three months. The pace of spending is typically slower in the first half of the fiscal. This is in line with the usual trend, and there will be no undershooting in terms of the spending targets we have set,” the official told Moneycontrol.

Ahead of the general elections that is scheduled to be held in 2024, Prime Minister Narendra Modi said that India is planning to extend its free food grains programme by five years.

The free food grain scheme known as the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) allows eligible citizens to purchase five kg of food grains per person per month at highly subsidised prices

The official also told Moneycontrol that the cost of providing LPG cylinders at Rs 300 to beneficiaries of the Pradhan Mantri Ujjwala Yojana will have an additional impact of Rs 3,840 crore, while the decision to sell wheat flour at a subsidised rate of Rs 27.50 per kg under the Bharat Atta scheme will have no impact on government spending