Expressing concern over rising subsidies, Prime Minister Manmohan Singh on Saturday said they are not achieving the objective of reducing inequities.
"We spend far too much money funding subsidies in the name of equity, with neither equity objective nor efficiency objective being met," he said while speaking at the Golden Jubilee celebrations of the Institute of Economic Growth in the Capital.
The Prime Minister called for more rational solutions to deal with the problems of regional imbalance and inequities in growth.
Such an approach, he said, was necessary to address the major concerns which are rural-urban divide and inter-regional imbalance.
Stressing the need for renewed commitment to reforms, Singh expressed the hope that India would be able to catch up with South-East Asia and East Asia by implementing the strategy spelt out in the 11th Plan.
He also underlined the need for accelerating investments and savings rate to sustain the growth momentum.
"We need rapid expansion of labour-intensive manufacturing industries. We need new path ways to increase agriculture output and productivity," the prime minister said.