Prime Minsiter Manmohan Singh on Saturday expressed concern about rising economic disparities despite a mounting subsidy bill. He doubted whether funds meant for the poor were actually reaching them.
“Equity does not always imply offering subsidies. If such subsidies do not reach the poor, they do not address the objectives they are meant to. We spend far too much on subsidies in the name of equity, with neither equity objectives nor efficiency objectives being met,” Singh said at the golden jubilee of the Institute of Economic Growth.
Over Rs 1 lakh crore would be spent in 2007-08 as subsidies on food, fertiliser and petroleum. This is the second time in recent times that Singh has spoken out strongly against a subsidy regime that did not address the objectives of equity. During a meeting of the Planning Commission in November, Singh told the Cabinet to ponder over development options that subsidies were shutting out.