Financial Daily from THE HINDU group of publications
Tuesday, Apr 09, 2002

Port Info

Group Sites

Opinion - Letters

Debt commitments

While replying to the discussions on the Budget for 2002-03 in the Lok Sabha, the Finance Minister, Mr Yashwant Sinha, stated that out of the total revenue expenditure, 48 per cent was accounted for by interest payments, 26 per cent by defence and 16 per cent by subsidies. Since nearly half of the revenue expenditure is spent on interest charges, one could presume that the Government's debt commitment is extremely high.

It is, therefore, time to review the advisability of entering into further debt commitments for some time and also to critically examine the utilisation of the amounts already raised, to ensure that they are spent in a most advantageous manner. The situation calls for the institution of a mechanism in every Ministry or Department to undertake such periodic reviews so as to ensure a satisfactory progress vis--vis expenditure and to prevent cost overruns.

The Budget proposed steep upward revision of costs of cooking gas, kerosene and postal stationeries. The intention is to reduce the subsidy element progressively. However two factors appear to have been not considered in the issue. Fundamentally, subsidies are meant to ease the burden of the not-so-well-to-do sections of the society. However, in the case of cooking gas, the price charged is the same, irrespective of the financial status of the consumer. As a result, the subsidy reaches unintended and untargeted destinations among the people.

There is therefore, a case for a graded pricing system. Second, kerosene is now being used as a fuel only by the poorer sections and its price should not have been hiked. In comparison, petrol is mostly used by economically better-placed people.

T. R. Anandan


Send this article to Friends by E-Mail

Stories in this Section
An economy taxed

Damayanti and the Krisis
Of checks and balances
Can Gujarat fund another rehabilitation?
The furies of Salman Rushdie
Bt cotton: Bane or boon?
Move to decentralise food procurement -- Third revolution on farm front?
Protecting India's intellectual genius
Holocaust in Gujarat
Debt commitments

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line