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Cues for India in Pak subsidy schemes

Pakistan plans to introduce two initiatives: a card scheme to provide direct subsidy to the poor, and lower fuel price for two-wheelers and small cars, reports Chetan Chauhan.

india Updated: Jun 24, 2008 23:14 IST
Chetan Chauhan

Prosperous India may have some lessons to learn from its neighbour on how to cushion the poor from rising inflation and high fuel prices. Pakistan plans to introduce two initiatives: a card scheme to provide direct subsidy to the poor, and lower fuel price for two-wheelers and small cars.

The Benazir Income Support Card will enable poor people to get a cash grant of Rs 1,000 every month, apart from medical insurance, subsidised food and training for employment, Dr Salman Faruqui, deputy chairperson of Pakistan's planning commission, said after meeting his counterpart Montek Singh Ahluwalia on Tuesday.

At a time when inflation has risen to 12 per cent in Pakistan, the scheme will help the poor sustain themselves. “The scheme has been devised to combat the food crisis and fuel price rise,” Faruqui said. The scheme - which aims to cover 5-7 million people, about 20 per cent of the country's population – has caught the interest of Ahluwalia, who wanted to know its impact on poverty alleviation.

The other proposal is to have lower fuel prices for two-wheelers and smaller cars, up to 800 cc engine capacity, and market price for bigger vehicles.

“We are heavily subsiding the oil sector and as a result of it well-off people are also benefitting. I find a similar situation exists in India as well,” said Faruqui. Indian planning officials, however, find this a more different scheme to implement.

Speaking about the Iran-Pakistan-India pipeline, Faruqui expressed confidence that India would join the agreement.

“From all the indications that we have, India will be joining with us. This pipeline is good for both India and Pakistan,” he said. Faruqui also believes that India and Pakistan should join hands to ask the oil producing countries to check rising international fuel prices.