Subsidy bill to rise hugely this year with the rise in under recoveries on oil increasing, plus the addition of provisioning for the Food Security bill burden for the next three to four months, that will left for implementation in this fiscal, but this deficit will go haywire for the next fiscal. Here the next finance minister will be sitting on throne laid down by the present government's mismanagement of economy.
The road is being forced down for huge raise in prices of diesel to touch 65 in near future as losses on diesel sales have widened to Rs 10.20 from Rs 9.29 a litre, in addition to this Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder the oil companies are losing at the end of July.
IOC Director of Finance P K Goyal said that the total revenue loss or under- recoveries on diesel and cooking fuel was estimated at Rs 80,000 crore at the beginning of the fiscal, which have now widened to Rs 140,000 crore, a huge amount of Rs 60,000 crores, when the Rupee has depreciated 12 per cent since April. Rupee was 59.39 to a dollar and today it is 64.10 and fast heading for 66 today (Tuesday 27th August) .
Each one Rupee depreciation against the US dollar adds Rs 8,000 crore to under-recoveries, and it may end up by more than twenty billions dollar by the end of this fiscal,as the fast depreciating rupee may soon touch to 70. The fallout of such terrific decline in rupee will be very very tough to manage for the finance minister in the near future, more when it has huge cascading effects on the economy.