New Delhi: Government Wednesday dismissed fears of any sharp spike in fiscal deficit this year because of the food security programme that will be implemented once the legislation is through in Parliament.
Highly-placed sources said that an estimated Rs.1,27,000 crore for implementing the scheme is for a full financial year and it will be much lower in the current fiscal as five months have already passed.
The sources said a sum of Rs. 90,000 crore has already been provided for in the current year's budget as food subsidy, including Rs.10,000 crore for the new programme, and it would not cross this level at any rate.
Thus, they said, there was no basis for fears that the food security law, which will be taken up by Rajya Sabha on Sept 2, will lead to huge rise in the fiscal deficit in the current year once the programme is implemented.
They said the law itself provides for a one-year period to roll out the programme and it would take that much time for implementation.
The finance ministry is very clear that that the subsidy will not exceed Rs.90,000 crore in the current year, the sources said adding "We will not allow it to be breached."
The value of Rupee against dollar has plummeted to new levels and the stock markets tanked after the passage of the Food Security Bill in Lok Sabha on Monday on fears that the fiscal deficit would balloon further on implementing the of land market food security scheme.
First Published: Wednesday, August 28, 2013, 19:02