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2002-03 budget to have Rs 12,000 cr provision of petro subsidy
Finance Minister Yashwant Sinha will for the first time make a budgetary provision of upto Rs 12,000 crore towards subsidies for petro products for the next fiscal despite dismantling of Administered Pricing Mechanism (APM) in the oil sector.
Finance Minister Yashwant Sinha will for the first time make a budgetary provision of upto Rs 12,000 crore towards subsidies for petro products for the next fiscal despite dismantling of Administered Pricing Mechanism (APM) in the oil sector.
Even if the government decides to bring down the subsidy on kerosene for Public Distribution System (PDS) and Domestic Cooking Gas (LPG) to the residual level of 33 and 15 per cent respectively, the budget for 2002-03 would have to bear Rs 7200 crore additional burden, highly placed sources said.
Subsidies for these mass consumed cooking fuels, which are presently managed through a complex mechanism of oil pool account, would be paid directly from the general budget after APM for petrol, diesel, kerosene and LPG is dismantled and sector decontrolled on March 31, 2002.
Sinha and petroleum minister Ram Naik have held several rounds of discussions on dismantling of APM but have not yet reached an understanding on how far the subsidies would be reduced from next fiscal, sources said adding the two have broadly reached a consensus to phase-out entire subsidy of 42 per cent on kerosene and 40 per cent on LPG by 2006. While Naik has favoured bringing down the subsidy on kerosene and LPG to the residual level of 33 and 15 per cent respectively, as envisaged in the 1997 Cabinet resolution for dismantling of APM, through duty cuts, finance minister is not likely to oblige, sources added.
Bureau Report
Subsidies for these mass consumed cooking fuels, which are presently managed through a complex mechanism of oil pool account, would be paid directly from the general budget after APM for petrol, diesel, kerosene and LPG is dismantled and sector decontrolled on March 31, 2002.
Sinha and petroleum minister Ram Naik have held several rounds of discussions on dismantling of APM but have not yet reached an understanding on how far the subsidies would be reduced from next fiscal, sources said adding the two have broadly reached a consensus to phase-out entire subsidy of 42 per cent on kerosene and 40 per cent on LPG by 2006. While Naik has favoured bringing down the subsidy on kerosene and LPG to the residual level of 33 and 15 per cent respectively, as envisaged in the 1997 Cabinet resolution for dismantling of APM, through duty cuts, finance minister is not likely to oblige, sources added.
Bureau Report