Budget 2020 subsidy burden looks benign due to off-budget borrowing

Fertiliser subsidy down, food subsidy up

The fiscal woes might have been far more grim than those projected in the Budget had the government not resorted to off-budget financing for major subsidies, including food, fertiliser, and petroleum subsidies. 

The three sectors form a significant component of the revenue expenditure. The expenditure on account of these was reduced from the budgeted level of Rs 3.01 trillion to Rs 2.27 trillion in the Revised Estimates (RE) for 2019-20 (FY20).  

The expenditure resulting from subsidies is expected to be Rs 2.27 trillion in the Budget Estimates (BE) for 2020-21 (FY21).

The main reason for the decrease in subsidies in