LPG subsidy bill races beyond budget, may hit Rs 1 lakh crore this fiscal
A financial report indicates that India's LPG subsidy bill for FY27 is projected to exceed Rs 1 trillion, significantly surpassing the initial budget allocation of Rs 300 billion. Rising global fuel prices and geopolitical instability are cited as the primary drivers for this increased fiscal burden.
Why it matters
The ballooning subsidy costs pose a challenge to the government's fiscal deficit management and capital expenditure plans.
The government's spending on LPG subsidies could climb past Rs 1 lakh crore in FY27, far exceeding the Rs 30,000 crore set aside in the Union Budget, according to a report by PL Capital.The report said the Budget provision of Rs 300 billion has already been surpassed, with the subsidy loss currently estimated at Rs 490 for every LPG cylinder. If spending continues at the current pace, the total LPG subsidy bill could cross Rs 1 trillion by the end of the financial year.It stated, "We estimate that the subsidy allocation of R s3,00bn in budget for FY27 has been long overshot, and current LPG subsidy loss per cylinder if Rs 490 and at current run rate LPG subsidy might cross Rs 1 trillion".PL Capital attributed the rising subsidy burden to the government's decision, along with oil marketing companies (OMCs), to absorb a larger share of higher fuel and LPG…
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