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No question of cutting down subsidies for poor: Chidambaram

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Our Bureau

New Delhi, Feb. 8

THE Finance Minister, Mr P. Chidambaram, on Tuesday reiterated Government's commitment to fulfil its responsibility towards the welfare of the poor and made it clear that there was no question of cutting down the subsidies intended for the underprivileged.

Addressing the meeting of the Parliamentary Consultative Committee attached to the Finance Ministry, Mr Chidambaram said that the efforts of the Government are directed towards ensuring that the benefits of subsidies are maximised by making them transparent, well designed and targeted.

Mr Chidambaram held that the best way to ensure that the subsidy reaches the intended beneficiary is to pay it out at the retail point to the ultimate beneficiary. He shared the view of many members that there are some shortcomings in the procurement, storage and distribution of foodgrains and underlined the need for eliminating the inefficiency and wastage at all levels of the Public Distribution System

He highlighted that providing minimum consumption entitlements to the poor by subsidising the essential items consumed by them was an extremely important welfare dimension of Government expenditure.

At the meeting, wide-ranging discussions were held especially on subsidies for food, fertilisers and petroleum products. Members advanced many suggestions such as effective identification of BPL families, reduction in costs of production, storage and distribution, introduction of food coupons, conversion of fertiliser plants into gas based plants, phasing out of non-merit subsidies, separate rates for commercial and domestic use of LPG, incentive subsidy for employment oriented production techniques, making fertiliser subsidy cultivator oriented and inclusion of more backward areas for subsidy eligibility.

Almost all the members of the committee voiced their concern about the state of the delivery mechanism, which they said should be revamped and improved. The members urged the Government to ensure that the subsidies provided in the Union Budget are effectively and efficiently targeted so that the benefits ultimately reach the poor for whom it is intended.

(This article was published in the Business Line print edition dated February 9, 2005)
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