The committee has suggested a pragmatic approach and the government should accept it. The question is whether they can do it in an election year or not. I think the government has to do these kind of reforms and they should start working on it. They should have a road map to achieve the objectives outlined in the report. As far as urea and diesel prices are concerned, there should be complete decontrol rather than price increase in steps. The subsidies on these account not only result in an increase in fiscal deficit but also in distortion. Petroleum price decontrol is a solution the government should look at.
The finance minister has already indicated a review of the
Direct Taxes Code Bill. It’s a good idea to have a thorough review of the current Bill.
M GOVINDA RAO
Member, Prime Minister’s Economic Advisory Council