Unrestricted subsidy growth damaging

Our Bureau Hyderabad | Updated on November 05, 2012 Published on November 05, 2012

Deputy Chairman of Planning Commission Montek Singh Ahluwalia today said that unrestricted growth of subsidies is financially damaging.

It prevents States from helping the poor... On subsidies in the power sector, he said the Government has planned to resolve the issue of debt restructure of financially stretched distribution companies.

But they have to eliminate the operating deficit within three years partly by raising tariff and by curbing transmission and distribution losses.


“During the second half of the year, the growth rate will be better. Many will agree with this as the signs of deceleration have stopped. But we have to be watchful and cannot be sure of making prediction for the next three months,” he explained.

“A number of initiatives have been taken for revival of the confidence of investors by removing the impediments dogging large projects. The issues of fuel supply, both gas and coal, for the power sector are receiving a lot of attention and are being addressed,” he said.


“There is no difficulty in gas supply. The import is free but the cost is high. To hike output of domestic gas will take time. In the case of coal, output can be increased and additional coal can be imported,” he said.

Coal India Ltd has signed fuel supply agreements with large projects and the issue is about import of coal and arriving at a pooling price. This price needs to be moderate. How to arrive at pooling price is being worked out, he added.


Published on November 05, 2012
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