C. K. Ramaswamy, Under Secretary, Ministry of Finance, Government of India, writes:

The basis of the report published on January 10, 2014 headlined “Convenient accounting of subsidies to hit new government” is wrong. Subsidies for food, fertilizer and fuel, as provided in the Budget, have been or will be disbursed during the current financial year to the FCI, fertilizer companies and oil marketing companies. No part of the subsidy bill will be rolled over to the next financial year.

It is a longstanding practice of the government to pay the subsidy for fuel for the fourth quarter in the first quarter of the succeeding year. The subsidy for Q4 of 2012-13 was paid in Q1 of 2013-14. Similarly, the subsidy for Q4 2013-14 will be paid in Q1 of 2014-15.

As far as a financial year is concerned, subsidy for four quarters will be disbursed during the year.

In the case of the FCI, part of the food subsidy for a financial year is released only after audit of accounts. The same practice will be followed this year. Hence, the report that financial accounting is being done in a manner that will hit the new government is baseless.

Puja Mehra replies

The rejoinder does not contradict the story. I have mentioned in the closing para of the story: “Senior Finance Ministry officials confirmed to The Hindu : “The subsidy bill of the last quarter of 2013-14 will be accounted for in the month of April so it will reflect in the expenditure for the next financial year or 2014-15.”

“They added that it was not unusual for the Finance Ministry to roll over expenditure from one financial year to the next.”

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