Similarly, the subsidy bill for nutrient-based fertilisers, as shown in the revised estimates for 2018-19, is Rs 25,090 crore, exactly the same figure that was given in the Budget estimates a year ago. But the expenditure already incurred under this head in the April-November 2018 period is Rs 20,152 crore, or a monthly run rate of Rs 2,519 crore. And if the expenditure continues to take place at the same rate in the remaining four months of the year, the total annual bill for nutrient-based fertilisers subsidies would go up to Rs 30,228 crore, which will be Rs 5,138 crore higher than the revised estimates put out in the interim Budget.
That leaves the petroleum subsidy bill, which the revised estimates in the interim Budget had put at Rs 24,833 crore, which was actually lower than the Budget estimates of Rs 24,933 crore for the same year. Crude oil prices had gone up steeply during the year and the subsidy bills for cooking gas and kerosene should have gone up. Indeed, the subsidy bill on petroleum incurred in the first eight months of the year was estimated at Rs 23,142 crore, indicating a monthly run rate of Rs 2,893 crore. If this run rate continues for the remaining four months, the total annual subsidy bill on petroleum would go up to Rs 34,713 crore, which would be Rs 9,880 crore more than the revised estimates put out by the interim Budget.
The total expenditure incurred on these major subsidies during 2018-19, as per the revised estimates, is Rs 2.66 trillion, which is marginally higher than the Budget estimates of Rs 2.64 trillion. But if you extrapolate the data from expenditure already incurred on these subsidies in the April-November 2018 period to the full year, the slippage could be as high as Rs 0.62 trillion and the actual major subsidies bill could go up to Rs 3.28 trillion, compared to Rs 2.64 trillion given in the revised estimates.
Remember that the monthly figures on the subsidies expenditure already incurred are compiled and released by the Controller General of Accounts (CGA) every month. Of course, the CGA’s numbers are unaudited and provisional. Also, the trend rates logic may not apply in each and every case. The Budget makers have more access to information and data, which may have given them the confidence to put out the revised numbers. It is also possible that its impact on the final fiscal deficit figure could be neutralised by under-spending, compared to the revised estimates, under some other heads. Or has a part of this expenditure been deferred to the next year? But a deviation from the trend rate by as much as Rs 0.62 trillion on major subsidies alone could have serious implications for the quality of the government’s overall fiscal consolidation programme.