Subsidies can’t be rolled back abruptly, reforms will be gradual: Govt official

The government aims to achieve this rationalization of subsidy by maintaining constant engagement with the ministry of agriculture, the department of food and public distribution, the department of fertilizers, and the Indian Council of Agricultural Research (ICAR), he said.

Food subsidies, he said, were essential to ensure food security for poorer sections of the population across different regions, even as declining poverty levels were acknowledged. Similarly, fertilizer subsidies reflected a firm government commitment to ensure adequate availability of fertilizers for farmers, he told Mint.

At the same time, the government is exploring ways to optimize fertilizer use through better data and technology, amid concerns about overuse in certain regions and the resulting impact on soil health.

“Platforms such as AgriStack, along with pilot projects carried out in states like Haryana and Madhya Pradesh, had shown encouraging results in mapping fertilizer consumption patterns and farmer databases. These efforts would be scaled up in a step-by-step manner without diluting the government’s commitment to provide farmers with the fertilizers required for their crops," said Vualnam.

This assumes significance as India’s food subsidy is estimated at ₹2.28 trillion in the coming financial year beginning 1 April, lower than the revised estimate of ₹2.28 trillion for the current financial year. Major expenditure on food subsidy is under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), under which the government supplies free ration to more than 810 million beneficiaries.

The fertilizer subsidy is also projected lower at ₹1.7 trillion for the next financial year, compared to the revised estimate of ₹1.86 trillion for the ongoing 2025-26 fiscal. The total subsidy on urea is projected at ₹1.16 trillion while that for non-urea fertilizers is at ₹54,000 crore during FY27.

On the Bharat VISTAAR initiative announced in the budget, the expenditure secretary said that it would be anchored by the ministry of agriculture, with AgriStack being linked to ICAR’s knowledge databases. The aim, Vualnam said, is to ensure that farmers are better informed about the correct type and quantity of fertilizer, as well as appropriate crop choices, enabling more efficient input use over time.

Addressing concerns about fertilizer prices amid geopolitical disruptions and a reduction in fertilizer subsidy outgo, Vualnam said that careful planning and better targeting would help contain pressures.

He also highlighted the government’s continued emphasis on capital expenditure, saying infrastructure creation was yielding strong results. He pointed to the construction of around 10,000km of national highways annually, the expansion of the rail network by about 3,000km a year, and the rapid growth of metro rail systems, with India now having the largest metro network globally. Shipbuilding has also emerged as a new focus area, reflecting the broader push for infrastructure-led growth.

On ensuring that higher capital expenditure translates into timely asset creation, the expenditure secretary said that project monitoring was being carried out at multiple levels. Ministries have strengthened internal monitoring mechanisms, while greater use of public-private partnership models has improved implementation discipline. At the central level, the Project Monitoring Group tracks all large projects above ₹300 crore, reviewing delays and calling in departments to address bottlenecks.

On fiscal consolidation, Vualnam said that while reducing fiscal deficit remains important, the government’s focus has now shifted to managing the debt-to-GDP ratio, as outlined in the budget. India is targeting a debt-to-GDP ratio of around 50%, plus or minus one percentage point, by 2030-31. With economic growth remaining strong and expenditure being closely monitored, the government is confident of staying on the announced fiscal glide path.