Policy and Financing Framework for Livelihoods
27
ANNEXURE 2.1
How much subsidies reach the target
Product
Producer subsidy
Consumer
subsidy
Fiscal
expenditure
(Cr.)
Fiscal expenditure
(percent of
2011–12 GDP) What share of benefits accrue to the poor?
Railways
N/A
Subsidised
passenger fares
1
`
51,000
0.57
The bottom 80 per cent of households
constitute only 28.1 per cent of total
passenger through fare on railways
Liquefied
petroleum gas
N/A
Subsidy (now
via DBT)
`
23,746
0.26
The bottom 50 per cent of households only
consume 25 per cent of LPG
Kerosene
N/A
Subsidy via
PDS
`
20,415
0.23
41 per cent of PDS kerosene allocation are
lost as leakage, and only 46 per cent of the
remainder is consumed by poor households
Fertiliser &
nitrogenous
commodities
Firm and nutrient specific subsidies
to manufacturers. Import of urea
regulated by the government
Maximum
`
73,790
0.82
Urea and P&K manufacturers derive most
economic benefit from the subsidy, since
fanners, especially poor farmers, have elastic
demand for fertiliser
Rice (paddy)
Price floor (minimum support
price)
Subsidy via
PDS
`
129,000
1.14
15 per cent of PDS rice is lost as leakage.
Households in the bottom 3 deciles consume
53 per cent of the remaining 85 per cent that
reaches households
Wheat
54 per cent of PDS wheat is lost as leakage.
Households in the bottom 3 deciles consume
56 per cent of the remaining 46 per cent that
reaches households
Pulses
Price floor (MSP)
Subsidy via
PDS
`
158
0.002
The bottom 3 deciles consume 36 per cent of
subsidised pulses
Electricity
Subsidy
Capped below
market price
`
32,300
0.36
Average monthly consumption of bottom
quintile = 45 kWh vs top quintile = 121 kWh
Bottom quintile captures only 10 per cent
of the total electricity subsidies, top quintile
captures 37 per cent of subsidy
Water
N/A
Subsidy
`
14,208
0.50
Most water subsidies are allocated to private
taps, whereas 60 per cent of poor households
get their water from public taps
Sugar for sugar
cane farmers,
subsidy to mills
Minimum price
Subsidy via
PDS
`
33,000
0.37
Total
`
377,616
4.24
48 per cent of PDS sugar is lost as leakage.
Households in the bottom 3 deciles consume
44 per cent of the remaining 52 per cent that
reaches households
Source:
Excerpted from the
Economic Survey 2014–15
, Ministry of Finance, Government of India.
