The Finance Minister detailed a two-pronged strategy at a meet organised by Peter G. Peterson Institute for International Economics – a Washington-based think tank.
India is working towards elimination of subsidies in all areas except for food and is also taking concrete steps to reduce massive leakages in subsidy.
“My strategy would be two-pronged, first to prevent the leakage of subsidy by taking technological advantage by ensuring that subsidy reaches the targeted beneficiary. I have already started taking some measures in that direction,” Finance Minister Pranab Mukherjee has said.
He was responding to a question at the Peter G. Peterson Institute for International Economics – a Washington-based think tank, which had organised the event in association with the Confederation of Indian Industry (CII).
“For instance all consumers of LPG are receiving at the market rate but targeted beneficiaries are receiving the subsidies in their bank accounts. This is operationalised in pilot project and after some time it would be applied universally,” he said.
Similarly, the government is trying to address another area of fertiliser and kerosene where there is misuse of subsidy.
“Third area is of course of quantum ceiling ... currently is 2 per cent of the GDP, target is to reach 1.75 per cent in three years. I am quite confident that it is possible to do so,” he noted.