Pressure Mounts On Fm To Meet Subsidy Demand
Finance minister P Chidambaram was been under pressure on Thursday not only to adjust the subsidy his political allies demand for the new public distribution system but also because of the appointment of the Prime Ministers man to work with him in the finance ministry.
Chidambaram, who has hitherto ruled the roost in the finance ministry, will now have to work with Virendra Kumar, the new minister of state.
Kumar, a Janata Dal member, is close to Prime Minister HD Deve Gowda, having recently crossed over from the Ramakrishna Hegde camp.
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The pressure to find enough subsidy to fund the special PDS half-price for those below the poverty line was Chidambarams other headache.
The Left partners insist that the new PDS, promised last summer in the UFs common minimum programme, must be implemented. It provoked him to tell his colleagues in the government on Thursday that he just could not do it in the general budget.
That is when the Prime Minister turned to railway minister Ram Vilas Paswan to underwrite the subsidy through reductions in freight charges.
The Planning Commissions meeting to discuss the Lakdawala formula to determine the number of those below the poverty line was postponed yesterday, because it clashed with the steering committee meeting. The Lakdawala formula estimates the number of people below the poverty line at 36 per cent against the conventional method which puts it at 16 per cent.
Accepting the Lakdawala formula would greatly increase the number of those below the poverty line and, hence, the subsidy required to provide them foodgrain at half-price.