The Centre’s expenditure on major explicit subsidies in FY17 will be kept at slightly above R2.4 lakh crore, as against the budgeted figure R2.32 lakh crore.

Aggregate subsidy bills from designated agencies such as oil marketers, fertiliser companies and the Food Corporation of India will be higher by another R20,000 crore, but this amount could be rolled over, official sources said.

With the progress expected in the direct benefit transfer (DBT), subsidy bills could be curbed to a large extent next year, sources said. International commodity prices, however, could upset calculations, especially since fertiliser subsidies continue to be largely unbridled.

The revised estimate will factor in likely provision for an extra R9,000 crore under food subsidy. The amount will be used to repay FCI’s loan from the National Small Savings Fund. As reported by FE earlier, the NSSF will release R45,000 crore from its corpus to the FCI before the end of the current financial year to clear arrears of the Centre, which will repay the fund in five equal annual installments, starting FY17 itself.

So, the revised estimate of the food subsidy is likely to be pegged at about R1.44 lakh crore for FY27, up from Budget estimate of R1.35 lakh crore.

The Centre’s hands are tied due to the R32,000-crore shortfall in spectrum revenue. Virtually nil or paltry revenue is being expected from strategic sales as against the target of R20,500 crore in the current fiscal year. So, even after providing R9,000 crore more for food subsidies, it could still roll over subsidies worth R20,000 crore – R10,000 crore for food, R5,000 crore for fertiliser and R5,000 crore for fuel – to the next year.

The DBT enables, JAM (Jan Dean, Aadhaar and mobile), has resulted in cumulative savings of Rs 36,500 crore in subsidies such as on cooking gas, food and wages under the employment guarantee Act, etc, since FY15.