Stop subsidies to spur development: Chaturvedi

Interaction:Member of the Planning Commission B.K. Chaturvedi and Director of the Indian Institute of Science P. Balaram at a conference in Bangalore on Tuesday.— Photo: K. Gopinathan  

Member of the Planning Commission B.K. Chaturvedi has said that providing fuel subsidy will lead to country’s bankruptcy sooner or later. Speaking after inaugurating a three-day international conference on ‘Public Policy and Governance 2012’ here on Tuesday, he said providing subsidies is a political choice and doing away with them would help development to a great extent.

The conference was organised jointly by the Department of Management Studies and Public Affairs Centre of the Indian Institute of Science.

The Planning Commission had explained to the government that if subsidies were stopped, better infrastructure could be provided in rural areas. However, the government argued that spiralling fuel prices would result in inflation and the government was not in a position to afford it. “Now the fact of the matter is that providing subsidy is a policy choice,” he said.

Speaking at length on oil subsidy, he underlined the need to cut oil subsidy as it impacts the economy of the country to a large extent. The government’s fuel subsidy burden is between Rs. 1.4 lakh crore and Rs. 1.5 lakh crore a year. However, it is difficult to explain these things to the political spectrum, he admitted.

Advocating the need to put in place third-party independent monitors to ensure proper utilisation of funds while implementing various schemes, Mr. Chaturvedi observed that social auditing cannot stop people from siphoning off of funds meant for a project. So, third-party independent monitors become necessary.Though enormous benefits have been accrued from the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act, it has given room for funds being siphoned off. Funds sanctioned under the Act are being siphoned off at the local level, he alleged. Though the government was spending Rs. 40,000 crore under the MNREGA every year, there were allegations that poor quality work was being carried out under it as funds were being released to gram panchayats. In contrast, the Prime Minister Gram Sadak Yojana was doing well because there are three levels of monitoring — State, district and central. “Governance has to improve to a greater extent in the context of implementation of government projects and schemes”, he said.

Mr. Chaturvedi pointed out that several infrastructure projects were being delayed because it takes years to get environmental clearance from the agencies concerned.

‘Though MNREGA has benefited people, funds are being siphoned off at the local level’

‘Third-party independent monitors needed to ensure proper utilisation of scheme funds’