Centre spends more than ₹3 lakh crore in subsidies in FY25; food accounts for over 50%

The government has spent a total of ₹3.07 lakh crore on subsidies so far in FY25, with food subsidies becoming the largest component of its total subsidy expenditure.

Food subsidy accounts for more than 50% of the total subsidy spendings by the government in the first nine months of FY25, according to a report by the Bank of Baroda.

The total expenditure of ₹3.07 lakh crore is much higher than what the Centre spent in the same period last year. In the first nine months of FY24, subsidy expenditure amounted to ₹2.77 lakh crore.

However, the FY225 expenditure still remains lower than the ₹3.51 lakh crore spent in April-December 2022.

Food subsidies drive expenditure

The total subsidy spending by the government was driven by expenditure in food subsidy. In April to December of the ongoing fiscal year. So far in FY25, the Centre has allocated ₹1.64 lakh crore for food subsidies, according to the Bank of Baroda report.

This is higher than the ₹1.34 lakh crore spent in the same period last year but slightly below the ₹1.68 lakh crore recorded in April-December 2022.

Fertiliser subsidy expenditure tanks

While the government increased spending on food subsidies, the case was different for fertilisers. 

The expenditure on fertiliser subsidies has declined slightly in FY25 so far. Between April and December 2024, the government spent ₹1.36 lakh crore on fertiliser subsidies, compared to ₹1.41 lakh crore in the previous year and ₹1.81 lakh crore in April-December 2022.

Other highlights

The report also emphasised on a decline in the government's non-debt capital receipts, which include revenue from asset sales and disinvestments.

These receipts stood at ₹27,296 crore as of December 2024, lower than ₹29,650 crore in December 2023 and significantly below ₹55,107 crore in December 2022. This indicates weaker revenue collection and reduced success in generating funds through non-debt sources.

The report further highlighted that the Foreign Direct Investment (FDI) inflows into India have weakened. In November 2024, FDI inflows stood at $2.4 billion, a sharp decline from $4.3 billion recorded in October 2024. The report also noted an increase in foreign investor outflows from the Indian stock markets, adding pressure on overall inflows into the country.

(With ANI inputs)