Second Covid wave, global prices could derail Centre's FY22 subsidy maths

The Centre's plan to start FY22 on a clean slate seems to have gone for a toss within just six months after it cleared the food subsidy backlog and paid its pending liabilities to NSSF

During the Covid-19 lockdown and consequent disruption of the economy in FY21, the Central government cleared two big items in India’s subsidy basket--food and fertilisers--in a bold move designed to start the current financial year on a relatively clean slate.

While fiscal deficit zoomed despite best efforts, it did wipe off the entire food subsidy backlog and the Centre's dues to NSSF, enabling the government to start FY22 on a clean slate.

However, just within six months, the subsidy maths has gone for a toss both in food and fertilisers.

While the second Covid wave and the economic hardship that