New Delhi, 28 Aug (PTI): The government dismissed fears of any sharp spike in fiscal deficit this year because of the food security programme that will be implemented once the legislation is passed by Parliament.
Highly-placed sources said that an estimated Rs.1,27,000 crore for implementing the scheme was for a full financial year and it would be much lower in the current fiscal as five months had already passed. The sources said that a sum of Rs. 90,000 crore had already been provided for in the current year’s budget as food subsidy, including Rs.10,000 crore for the new programme, and it would not cross this level at any rate. They added that there was no basis for fears that the food security law, which will be taken up by Rajya Sabha on 2 September, would lead to a huge rise in fiscal deficit in the current year once the programme is implemented.
The law itself provides for a one-year period to roll out the programme and it will take that much time for implementation. The finance ministry is very clear that that the subsidy will not exceed Rs.90,000 crore in the current year, the sources said, adding, “We will not allow it to be breached.”
The value of the rupee against the dollar plummeted to new lows and the stock markets tanked after the passage of the Food Security Bill in Lok Sabha on fears that fiscal deficit would balloon further after the implementation of the landmark food security scheme.