Chidambaram for subsidy re-look

Press Trust of India, 2 December

New Delhi, Dec. 1: With government saddled with a huge subsidy burden, finance minister Mr P Chidambaram today favoured re-visiting the sops once in three to five years to weed out relief to non-deserving sectors.

“We must re-visit subsidies once in three years or five years to remove non-merit sectors and focus on only deserving sectors,” he said replying to a debate in the Rajya Sabha on the Bills seeking supplementary grants for a total of Rs 33,290 crore.

However, Mr Chidambaram insisted that subsidy on food, fertilisers and some fuels would continue. “It is nobody’s case that all subsidy will go. We are not reducing subsidy for PDS. The budgeted provision was higher than the previous year and we have not increased the issue price of PDS (ration),” he said.

Addressing the full Planning Commission meeting last month, Prime Minister Dr Manmohan Singh had expressed concern over the mounting subsidy bill exceeding Rs one lakh crore on food, fertilisers and petroleum.After Mr Chidambaram’s reply, the House returned the Appropriation Bills on supplementary grants already passed by the Lok Sabha.

Squarely blaming state governments for “corruption” in distribution of foodgrains through PDS, Mr Chidambaram said an expert committee had found that only 36.38 per cent of allocated foodgrains reached the poor and a chunk got lost in leakages through “ghost” ration cards.

“It is an extremely alarming record and it is shameful”, he said. Asserting there was no fault in the supply of foodgrains by the Centre, he said state governments were “solely” responsible for distribution of foodgrains.

The finance minister expected that the agriculture growth would be close to four per cent this year and said without improvement in the farm sector, it would not be possible to address the fundamental issue of rural poverty and rural income.
“If growth (in agriculture) remains between two and three per cent, disparity will become wider,” he said. Mr Chidambaram said the government had set a target of achieving four per cent agriculture growth in the eleventh plan for which a number of initiatives have been launched. Responding to members' concern over the benefits of growth not reaching the poor, he said the government aims to achieve the double digit growth by the eleventh plan period.

He said it was only through accelerated growth that the government has been able increase its revenue and allot more resources to states.