Several bureaucrats, who are busy in framing policies for the new government, are giving priority to the issue of subsidies. According to them, reducing subsidies is not only the demand of economy but it also looks feasible as no state is going to polls in the next few months for now.

A bureaucrat, who is busy in framing policies on subsidies, said that ‘wastage’ of financial support would be a major issue before the new government but in order to work that, a stable government would be necessary.

A government, which would be formed by taking support of several parties, would not be able to take any concrete decision.

The incumbent Congress-led United Progressive Alliance (UPA) government has taken several steps to make the decision of cutting down subsidies reasonable.

Especially, some of the crucial decisions were taken to make the petroleum subsidy reach out to the appropriate person(s).

Even Bharatiya Janata Party (BJP)’s prime ministerial candidate Narendra Modi has been talking on wastage of subsidies for a long time.

The erstwhile National Democratic Alliance (NDA) government had taken several steps on minimizing subsidies. And it was also during then when it was decided to make the prices of petrol and diesel based on market rates.

This decision was however reversed by the UPA-I government, which formed the government along with the support of Left parties. But the UPA-II had moved ahead with this issue and the fuel prices were made available at market rates and a liberty of sorts was given to the market in terms of deciding the price of diesel.

A decision was also taken to reduce the number of subsidized cooking gas cylinders. However, several related decisions were put on hold due to elections and the records stand testimony to this fact that a government, which is formed by amalgamation of small parties, has never been able to take any firm decision on the issue of subsidies.

The reports of several firms dealing with the issues of finance make it clear that the economy can be at the state of stagnation even during the current financial year.  In such a scenario, the pressure would be on government to maintain a healthy balance in the state exchequer in order to keep tabs of the issue of subsidies.

This won’t put any compulsion on the government when it would come to reducing subsidies.

In the last financial year, a subsidy to the tune of Rs 2,45,451 core was given and in the current financial year, a provision of Rs 2,46,397 crore in terms of subsidies was included in the Interim Budget.


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