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Subsidies

Subsidies
outlookindia.com
-0001-11-30T00:00:00+0553
AS the responsibility of feeding 900 million people is the government's job, subsidies in agriculture will have to continue, says Mukherjee. "That's the line of argument we made in GATT which accepted our contention," he discloses. Every country provides subsidies to the agriculture sector for maintaining food security, and subsidies for food, fertilisers, water, irrigation and power are an absolute necessity. Whatever happened to Manmohan Singh's talk of reducing subsidies to cut the fiscal deficit, during the heyday of reforms?

The BJP too is hitched firmly on to the subsidy bandwagon. In its manifesto, it says it will ensure an efficient, low-cost, corruption free public distribution system (PDS), so that a regular and adequate supply of commodities in rural, tribal, remote and backward areas is ensured. Also, the PDS would supply better quality foodgrains, pulses, cooking oil and soap.

Not to be outdone, the Janata Dal has made food security a key part of its campaign. It promises, as part of food security measures, the introduction of public policies for ensuring physical and economic access to food and nutrition, and expansion of the PDS.

Says Rai: "Subsidies have been identified by economists as a main cause of fiscal deficit." Raghuraman feels pruning of subsidies on fertilisers, food, power, irrigation, education can't be put off indefinitely. Opines Mitra: "Now most of the parties have said in their mani-festos that agriculture would be treated as an industry. That means freedom for the agriculturists to fix their price. A better return from agricultural produce would naturally equip the government to progressively withdraw the subsidy element."

 There's little doubt that subsidies need to be reduced eventually. But there's little doubt about another fact too: India still has the largest mass of poverty-stricken and disenfranchised people, for whom free market economics has little to offer initially. Subsidies obviously are needed, they just have to go to the right people. Which party won't promise that, and quite rightly so? But which government can ensure that?

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