Accordingly when finance minister Nirmala Sitharaman will rise to present her maiden budget on July 5, one of the major challenges before her will be to contain the government’s increasing subsidy bill. The Union government gives subsidy bill on three major heads food, fertilizer and petroleum products. Meanwhile its subsidy bill on these three items was nearly Rs 3 lakh crore last year. According to the revised estimates, the total bill on the subsidies has gone up by nearly Rs 3,843 crore and the situation is going to be even worse as according to the latest official data, fertilizer and petroleum subsidies have registered a sharp spike in the first month of the current financial year.

Earlier in the interim budget, the Union government has allocated Rs 50,154 crore for urea subsidies. However, the government spent Rs 11,538 crore in the first month of this year itself, that is over 23% of the total budget for the entire fiscal. This is highly unusual as it is 600% of the amount spent by it during the same period last month. Union government had spent just Rs 1,836 crore in April last year on urea subsidies.

Furthermore subsidies on petroleum products have also registered a sharp spike in April. The government had allocated Rs 37,478 crore for petroleum subsidies in this year’s budget. However, it has spent Rs 5,168 crore or 14% in the first month itself. The amount spent by the government on petroleum subsidies in April this year is more than double of the amount spent by it on the same head during the same month last year.

As per revised estimates, the Union government’s subsidy bill has already gone up by Rs 3,843 crore from its budget estimates and if the early trends of this fiscal are any indicator then this year its overall subsidy bill is expected to register a steep rise.