Mumbai: Planning Commission deputy chairman Montek Singh Ahluwalia on Tuesday said the government should end the oil subsidy to offset the additional subsidy burden arising out of the new Food Security Bill.

"We have supported the Food Security Bill which will involve an extra cost of about Rs 21,000 crore annually. I think there are many wasteful expenditures. At the Planning Commission, our view is that it is not the food subsidy that should be reduced, but the petroleum subsidy which is dysfunctional and distorted, that could be reduced," Ahluwalia told reporters here this evening on the sidelines of an award function by the Outlook Money magazine.

On Sunday, the government cleared a new Food Security Bill that seeks to provide highly subsidised food to as much as 62.5 percent of the population, entailing an additional cash outgo of Rs 27,663 crore taking the overall food subsidy bill to nearly Rs 95,000 crore.

On GDP growth, he said, "so far we are not sure whether in Q3 the deceleration will end. October IIP was not good. In my view, if the growth rate is 7 percent or even lower, like 6.8 percent, it will still be very good performance compared to what is happening elsewhere."

On inflation he said "there is a sharp deceleration in food inflation and as food inflation goes down, core inflation will also come down. By March, it should be 7 percent or just above 8 percent."