LPG subsidy bill races beyond budget, may hit Rs 1 lakh crore this fiscal

LPG subsidy spending may exceed Rs 1 lakh crore in FY27, far above the budgeted Rs 30,000 crore.

PL Capital report states the budget allocation has already been surpassed, with a subsidy loss of Rs 490 per cylinder.

Rising subsidy burden is driven by the government and OMCs absorbing higher fuel and LPG prices amid ongoing war uncertainty.

Subsidy spending from April to May 2026 rose 47% year-on-year to Rs 755.4 billion, led by food, urea, and fertiliser subsidies.

Government is expected to keep capital expenditure cautious in H1 FY27 to control fiscal deficit despite higher subsidies.