New Delhi: Three of the five states that gave the highest subsidies per person in 2022-23 had the Bharatiya Janata Party (BJP) in power or as part of the ruling coalition, an analysis has found.
The top 10 subsidy-giving states on a per capita basis also included five that had the BJP in their governments at the time. The findings were part of an analysis done by Bank of Baroda’s economic research team last week on government subsidies at the central and state levels.
The data showed that Punjab, led by the Aam Aadmi Party, provided subsidies worth nearly Rs 7,500 per person in the state in 2022-23 — the highest in the country by a large margin.
Karnataka and Gujarat, both ruled by the BJP, came second and third, followed by Tamil Nadu, led by the Dravida Munnetra Kazhagam (DMK), and Maharashtra, where the BJP was part of the ruling alliance.
However, it is important to note that the BJP also features among the ruling parties or coalitions in states with the lowest per-capita subsidy burdens, as it has a wide presence across the country.
For example, of the 10 states with the lowest per-capita subsidy expenditure — Mizoram, Odisha, Kerala, Manipur, Assam, Tripura, Uttarakhand, Sikkim, Arunachal Pradesh, and Meghalaya — nine were led either by the BJP or one of its allies.
At the central level, the report found that subsidies as a percentage of GDP were still higher in 2022-23 than pre-pandemic levels.
However, the composition of central government subsidies had changed over the past decade, with food and fertiliser subsidies becoming more prominent than petroleum subsidies, it added.
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Stable trend in state subsidies
The data showed that the total subsidies given by the states and Union territories (UTs) in aggregate ranged between Rs 2 and 3 lakh crore in the pre-Covid years. The data is for 28 states and UTs.
“Only during the Covid-19 pandemic, the subsidy bill edged up to Rs 3.4 lakh crore in FY21 from Rs 2.2 lakh crore in FY20,” the report said, adding, “In the last fiscal year as well, the subsidy bill settled at around Rs 3.1 lakh crore.”
It added that of the 28 states and UTs analysed, 10 contributed towards 81 percent of the total subsidies in FY23.
While the report did not name all the 10 states, it did say that Maharashtra (13.9 percent), Tamil Nadu (9.5 percent) and Gujarat (8.3 percent) had the highest contributions.
For this financial year, the report said data was available for only 21 states, and showed that the total subsidy bill was expected to fall to around Rs 2.6 lakh crore.
However, it did also caveat this number by saying that the data for two key subsidy-giving states — Karnataka and Punjab — was yet to come.
Given that these two states together account for about 15 percent of all subsidies given by states and UTs, the final number could again touch Rs 3 lakh crore, the report said.
State-wise subsidy burden
To ensure comparability between bigger and smaller states, the authors of the report analysed the subsidies given by the states in 2022-23 on a per-person basis.
The data showed that four states provided more than Rs 4,000 worth of subsidies per capita. Of these, Punjab was the highest at Rs 7,428 in FY23. This was 42 percent higher than the previous year, which itself was 49 percent higher than in 2020-21.
Punjab was followed by Karnataka (Rs 4,274), Gujarat (Rs 4,272), and Tamil Nadu (Rs 4,097).
At around Rs 4,200, Karnataka’s per capita subsidy expenditure remained largely the same over the period FY21 to FY23. Gujarat’s subsidy expenditure per person, however, increased 14.3 percent in FY23, while Maharashtra’s increased 48 percent over the same period.
Notably, Tamil Nadu’s per capita subsidy expenditure fell substantially by 80 percent in FY22 before rising 36 percent in FY23.
Bank of Baroda did caveat the analysis by saying the population figures were from the 2011 Census and could have changed considerably since then.
(Edited by Richa Mishra)