1. Calculate the expenditure of the government on food subsidy.

Question

With the help of this pie chart, answer the following questions. 

Expenditure of the Government (Center and States), in 2011-12

In 2011-12 the government spent around Rs.23,00,000 crores. 

1. Calculate the expenditure of the government on food subsidy.

2. Discuss on what all was this money spent and the purpose for this?

Answer 1

Total government expenditure = 23,00,000 crores Share of food subsidy = 3%

Total food subsidy = 23,00,000 × 3/100 = 69,000 crores. 

2. 

• The government has assumed responsibility for supply of essential commodities like wheat, rice, sugar, edible oils and kerosene etc. 
• The prices of goods sold through Public Distribution System (PDS) are less than ‘ that of the market price and the difference in price – is borne by the government. 
• So the government spends 69,000 crores on-food subsidy.