Budget 2025 Expectations: In the next budget, the central government can allocate Rs 4.1 lakh crore for food, fertilizer and cooking gas subsidy. If this happens, the share of these major subsidies in the budget may increase to 8%. The purpose of increase in subsidy is to provide relief to rural and lower income groups. Finance Minister Nirmala Sitharaman will present the budget for the financial year 2025-26 on 1 February 2025.
Also read: Small Cap Champion: The country’s biggest small cap fund is the champion in 10 year returns, the money doubled in 3 years and four and a half times in 5 years.
How much can food subsidy increase?
According to estimates given by Reuters report quoting sources, the share of food subsidy in the total allocation of subsidies for the financial year 2025-26 may increase by 5% to Rs 2.15 lakh crore, which is 2.05 lakh crore in the previous year. Is more than lakh crore rupees. The main reason for this increase is the increase in rice procurement and storage costs. According to Reuters report, food subsidy can make a big contribution in the recovery of the economy in rural areas.
Also read: Investing in US Market: How can people living in India invest in the US market? What are its advantages and challenges?
Estimate of increase in LPG subsidy
According to the report, Rs 25,000 crore is likely to be allocated for LPG subsidy in the next financial year. This is more than double the current financial year’s Rs 11,900 crore. This subsidy is important to provide relief to the rising energy costs and domestic users.
Also read: HDFC Bank Q3 Results: HDFC Bank’s net profit increased by 2% to Rs 16,736 crore, NII increased by 7.7%.
Will there be change in fertilizer subsidy?
According to the report, the allocation of fertilizer subsidy is expected to be maintained at the current level of Rs 1.7 lakh crore. This allocation is important to combat the increase in fertilizer costs and maintain the productivity of the agriculture sector. Fertilizer subsidy is very important for the rural economy, which provides great relief to the farmers.
Also read: HUL Q3 Results: Hindustan Unilever’s net profit increased by 19% to Rs 3,001 crore, total income increased by 1.7%.
Role of subsidies amid economic challenges
India’s economy is currently facing a decline in growth rate and uncertainty at the global level has made the situation more challenging. In such a situation, subsidy can prove to be a big support for the rural economy. If the government proves the projections to be true and increases the allocation on food, fertilizer and cooking gas subsidy in the budget, then not only will the rural economy get a boost, but other sectors can also benefit from the increase in consumer demand.