https://www.rediff.com/business/report/quality-control-orders-what-does-this-mean-for-domestic-industry/20240425.htm
But the government will present a second tranche of Supplementary Demands for Grants during the Budget session of Parliament in February, when it can seek additional spending.
US strikes on Iran's three main nuclear facilities have once again raised concerns that Tehran might shut down the Strait of Hormuz - one of the world's most critical chokepoints, through which a fifth of global oil and gas supply flows.
The biggest headwind to the consumption story in FY23 is a sharp decline in government subsidies on food, fertiliser and fuel, and overall decline in revenue expenditure net of interest payments. This, analysts say, will adversely impact purchasing power of households at the lower end of the income pyramid, translating into lower spending on consumer goods and services.
In a bid to encourage the fertiliser industry to increase its production volumes, the government has extended the system of actual freight reimbursement to all types of fertilisers. Currently, only urea enjoys this concession.
The central government is considering an expansion of the list of fertilisers that are eligible for subsidy.
'It has been an ongoing process, talking to the relevant ministries about eliminating leakages and curbing non-core expenditure in various schemes.'
Beneficiaries of kerosene, LPG and fertiliser subsidies will be able to get direct cash transfers through banks, ATMs or even mobile banking after the UIDAI's recommendations to plug leakages in the system are implemented.
According to sources, the task force made a separate presentation on fertiliser, LPG and kerosene, covering issues like existing subsidy regime and the proposed new model.
Non-banking entities such as fintech firms will have to tap into use cases beyond peer-to-peer (P2P) and peer-to-merchant (P2M) transactions to scale up the presence of the retail version of the central bank digital currency (CBDC), which is also known as the e, said industry players. These use cases will enable programmable transactions across domains, including the government's direct benefit transfer (DBT) schemes, with subsidies restricted to specific purposes such as food coupons, hospital bills, fertilisers, pesticides, and cross-border remittances.
'We have essentially tried to set out an agenda for the next five years and it, in essence, represents the political commitment to that agenda.'
Of the cash outgo, Rs 64,598 crore is for enhanced expenditure on fertiliser subsidy under Atmanirbhar Bharat Abhiyan 3.0 and Rs 20,466 crore for the capital outlay in defence services.
'We now look at divestment as an opportunity for maximising the value of public assets, not necessarily as a short-term resource-raising measure.'
Analysts and the central bank remain concerned about widening oil subsidies.
Going the direct subsidy route, the prices of kerosene and LPG will go up in the market, but the extent of rise will not be as high as when the subsidy is given to everyone.
The government on Friday asked the Comptroller and Auditor General (CAG) to suggest ways to curb its rising subsidy bill on food, fertiliser and petroleum products without hurting the targetted population.
With crude oil prices nearing $100 a barrel, Prime Minister Manmohan Singh on Thursday expressed concern over mounting subsidies in petroleum as also food and fertiliser sectors, with discounts exceeding Rs 1,00,000 crore (Rs 1,000 billion) this year. The prime minister asked his Cabinet colleagues and the Planning Commission to "reflect what these mean for our development options and what development options these subsidies are shutting out".
Railways' freight loading traffic has been scaled down by 100 million tonnes from 1025 million tonnes because of economic slowdown, the minster said.
With an eye on the adverse fallout of rising oil prices, the Reserve Bank of India (RBI) on Monday said the government's subsidy bill for petroleum products and fertilisers might cross the projections for 2011-12 and put fiscal consolidation plans under strain.
The Economic Survey on Thursday prescribed reforms in the subsidy regime in oil, food and fertiliser sectors and asked the government to review the possibility of direct cash transfer to the targeted people.
The House approved the supplementary demand for the current financial year after Finance Minister Pranab Mukherjee replied to general discussion on the Budget in the Lower House.
Whether this remains under control in the coming months will depend on the future intensity and spread of the Russia-Ukraine war, and the effectiveness of the Indian government's response, points out A K Bhattacharya.
The Department of Fertilizers (DoF) plans to bring in all policies, including the New Investment Policy meant to overhaul urea production, under one umbrella - Nutrient-Based Subsidy (NBS) policy.
FM is planning on pre-budget cosultations with representatives of various sectors from Jan 7.
Nilekani proposes centralised PDS network, model PDS software for transparency.
The government on Monday sought Parliament approval for gross additional expenditure of Rs 44,945 crore in the current financial year. Of this, the net cash outgo will be Rs 19,812 crore, while the rest will be met by savings of the ministries or enhanced receipts. A significant part of this additional grant would be spent on food and fertiliser subsidy.
Although the Fitch revised the outlook on Long-term Local Currency Issuer Default Rating from stable to negative, it has retained the investment grade rating at BBB-, which indicates low credit risk. The downgrade by Fitch is one of the main reasons for all-round selling in the stock markets. Another global rating agency Standard and Poor's last week had said it might downgrade India's sovereign ratings, if the country's rising inflation and widening fiscal deficit.
The government on Monday constituted an inter-ministerial task force under UIDAI chairman Nandan Nilekani for evolving mechanisms to provide direct subsidies on kerosene, cooking gas and fertilisers to intended beneficiaries.
While conditions have improved over the last decade in western UP, there are still unfulfilled needs.
Reliance Industries Chairman Mukesh Ambani met top government officials on Tuesday, including Cabinet Secretary and Principal Secretary to the prime minister, to explain his company's approach to pricing of natural gas to be produced from KG basin.
Total subsidy bill could come down to around Rs 2 trillion.
The USA-India Chamber of Commerce has said the annual budget presented by the finance minister Pranab Mukherjee is a massive piece of fiscal stimulus which would spur growth and employment in the country.
For 2014-15, the bill on this account is likely to be 12.8% more than in 2013-14.
After prospects of a higher subsidy outgo on food and fertilisers, the government is faced with the spectre of a higher petroleum subsidy. Rising crude oil prices and its inability to increase fuel prices is all set to spoil the government's subsidy calculations. The country meets 80 per cent of its crude oil demand through imports.
Assocham president Niranjan Hiranandani said his talks with government officials showed dues to industry and states were pending in the form of refunds of income tax, value-added tax, and GST, and compensation, payments to discoms in the power sector, fertiliser subsidies, etc.
Concerned over the misuse of subsidies provided under various schemes, Finance Minister Pranab Mukherjee on Monday said the government will provide a direct cash subsidy on kerosene and fertilisers to the poor from March next year.
