Chief Economic Adviser to the Union Finance Ministry Kaushik Basu on Wednesday called for a more inclusive growth and reiterated support for giving food subsidy directly to people in the form of coupons.
Speaking at a workshop on “Indian economy and economic survey for 2010”, organised by Corporation Bank here, Mr. Basu said the public distribution system (PDS) was problem ridden and foodgrains supplied were adulterated.
The problems could be overcome if the Government issued subsidised food coupons to the beneficiaries directly while letting the fair price shops sell foodgrains at the market price.
He said the Government was spending a lot on food subsidy, but very little trickled down to the beneficiaries. The country was in need of a better, foolproof PDS.
An improved PDS could reach double the number of existing beneficiaries at half the cost, Mr. Basu said.
The benefits of development need to reach sections such as farmers, he said, and added that the country needed better anti-poverty programmes. To achieve the goal of poverty alleviation, the country had to invest in creating infrastructure to provide people an enabling atmosphere to grow.
Mr. Basu said that food inflation would “slow down during April, May and June. It should be much lower from July.”
Stating that the country would achieve double-digit growth rate in four years, he added that growth should be an instrument to reach out to the “segments that have done badly.” Projecting that the share of agriculture in the GDP would shrink further as the economy progressed, he said efforts to improve farm production should, however, continue.
He observed that agriculture alone could not sustain the livelihood of all people in rural areas. Industries and small manufacturing units need to be set up across the country.
Mr. Basu said that savings and investment habits of people had provided the much-needed resilience to the country's economy.
Mr. Basu said education and human resource development would be the key for further growth of the economy as demonstrated by Mangalore.
Senior Economic Adviser to the Ministry H.A.C. Prasad regretted that ports in the country were not performing up to the expectations.
Replying to a question, he said ports were functioning inefficiently despite the Government extending all support. Mr. Prasad said there was a need for reforms in port management.
Corporation Bank Chairman and Managing Director J.M. Garg said only banks could ensure inclusive growth. He and Vinay Hegde, Vice-Chancellor of the NITTE University, who inaugurated the event, regretted that farmers continued to be at the receiving end of the India's growth story.
Keywords: Public Distribution System