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March 2011

Centre forms task force to curb misuse of subsidies

By Raman Jokhakar
Tarunkumar G. Singhal
Chartered Accountants
Reading Time 2 mins
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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

51 Centre forms task force to curb misuse of subsidies

To curb the misuse of subsidised kerosene, cooking gas (LPG)
and fertilisers, the Centre has constituted an inter-ministerial task force
under Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani.

The team of experts will work to evolve a mechanism for
direct subsidy transfer and give its interim report within four months. Several
Government committees in the past, including the Kirit Parikh committee, had
recommended direct transfer of subsidies. States such as Haryana and Madhya
Pradesh are close to implementing a direct subsidy transfer for grains.

The Government had formed the task force in light of the
‘overwhelming evidence’ that the present policy of giving subsidy on kerosene
was resulting in ‘waste, leakage, adulteration and inefficiency’, the statement
said. The Government provides kerosene at subsidised prices to below-poverty
line families under the Public Distribution System. “Therefore, it is imperative
that the system of delivering the subsidised kerosene be reformed urgently,” it
added.

“Similarly, the system of provision and delivery of
subsidised LPG to intended beneficiaries needs to be reformed. The current
subsidy on kerosene is Rs.20.56 per litre while the same on domestic LPG is
Rs.356 per cylinder. This leaves a massive scope for black marketing in these
essential commodities,” the statement said.

(Source : Business Standard, dated 15-2-2011)

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