PM wants cut in subsidies

New reforms agenda to reduce subsidies and increase funding for education,health and infrastructure sectors would soon be on the government’s table.

Updated on: Mar 23, 2010, 23:56:47 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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New reforms agenda to reduce subsidies and increase funding for education, health and infrastructure sectors would soon be on the government’s table.

It could mean higher prices for food, fertiliser and petroleum products.

Prime Minister Manmohan Singh on Tuesday asked the Planning Commission on Tuesday to submit specific policy recommendations on reducing subsidies on fertiliser, food and railway passenger tariff that would cost government around Rs 1,15,000 crore in 2010-11 and for achieving nine pc economic growth by 2011-12.

“Subsidies cannot be open ended to benefit black marketers,” panel’s Deputy chairperson Montek Singh Ahluwalia said and added it should be controlled at providing the intended beneficiaries.

It could mean the panel asking the government for higher passenger tariff in railways, where annual subsidy burden is Rs 19,000 crore, linking increase in fertiliser prices with that of the minimum support price for 35 food grains such as wheat and rice, de-controlling petroleum prices as they are fundamentally unviable.

Ahluwalia said the money saved from subsidies could be invested for opening new “schools and hospitals”, which had received less funds as projected in the plan. “Time is right for higher public expenditure in these crucial social sectors”.

The panel suggested 100 specific policy recommendations in its mid-term review of the 11th plan discussed by PM with key Cabinet ministers at a full Planning Commission meeting. In his concluding remarks, PM Singh wanted them to be brought for the Cabinet’s consideration to incorporate policy corrections in the remaining two years of the plan.

The PM expressed hope that India can return to nine pc growth trajectory by 2011-12 and the plan should aim at 9-10 pc target for the 12th plan.

With the West showing very little signs of coming out of recession, Singh said the exports are likely to grow “more slowly” than they did before the crises. “We need another source of demand…that can ideally come from expansion in
investment in infrastructure”.

Except telecom, no other infrastructure sector would be able to meet the 11th plan targets. PM asked the plan to prepare a blueprint for fast-track clearance for investment and quarterly monitoring of infrastructure targets. The PM was hopeful that agriculture growth could be close to four pc in the remaining two years of the plan, if plans for expanding irrigation and rural infrastructure are properly implemented. He asked the commission to come up with a paper in Integrated Water Policy.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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