Roadmap to cut leakages, rationalise subsidies on anvil

The government is working on a roadmap to prevent leakages and better targeting of subsidies, mainly in food and fertiliser sectors, which run into lakhs of crores of rupees.

Senior officials of commerce, agriculture, food and fertiliser ministries have been assigned the task of preparing the roadmap to rationalise subsidies.

The government, an official said, is keen to rationalise subsidies with a view to help the needy and at the same time keep the fiscal deficit in check.

Main idea of the roadmap is to prevent leakages and better targeting of subsidies, the official said.

The government currently provides various kinds of subsidies including food and fertiliser, which run into lakhs of crores of rupees.

Food and fertiliser subsidy in 2015-16 is pegged at around Rs 1,97,387 crore.

The government provides these support measures for encouraging food production and keeping the prices low.

Presently, subsidies are open ended and even the rich gets it. The government is, however, planning to give subsidy to target groups.

The government is already implementing the direct benefit transfer scheme to ensure that the subsidy amount is credited directly into the Aadhar-linked bank account of the beneficiary.

The government has proposed to bring down its fiscal deficit to 3 per cent in three years.

For these these years the targets are: 3.9 per cent (of the GDP) for 2015-16; 3.5 per cent for 2016-17; and 3 per cent for 2017-18.