Union Budget 2021 has pegged government subsidies on food, petroleum & fertilizers for the fiscal year 2021-22 at Rs.3.35 lakh crore which is up by 47% compared to the last year estimate which was Rs.2.28 lakh crore. For 2021-2022, the food subsidy budget has been set at almost ₹2.43 lakh crore.
The rise in food subsidies is due to COVID-19 and it’s impact on the classes of below poverty line. Around 80 crore BPL families have benefited from the government distribution of free food grains, during April-November 2020.
Though the subsidy on petroleum has declined. The fertilizer subsidy for the year 2021-22 has been kept at Rs.79,530 crore and the main reason for it could be no rise in the basic maximum retail price of Urea since 2010.