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Realistic comments of Prime Minister Dr Manmohan Singh on subsidies recall comments of former Prime Minister Rajiv Gandhi that just 15 per cent of the released government aid reaches the needy. It is time subsidies are gradually but speedily abolished because they are mostly misused by black-marketers through selling subsidized commodities in black market.

Even otherwise, subsidies account for increased dose of taxes or deficit financing, both of which result in price increases, thereby negating effect of any genuine subsidy.

Some subsidies, like those on post-cards, are a heavy burden on the exchequer even though are meaningless in practice. The cost of post-cards, now priced at just 50 paise, can be raised to Re 1, as even beggars refuse to accept coins below one rupee!

Subhash C. Agrawal e-mail

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