Best of BS Opinion: Subsidy surge and a search for fiscal discipline

Here are the best of Business Standard's opinion pieces for today

AgriStack, which Finance Minister Nirmala Sitharaman has described as the “next UPI”, aims to build a digital public infrastructure for agriculture. Unlike UPI, which connects bank accounts for payments, AgriStack is designed as a data backbone to streamline subsidies, credit and insurance. Yet structural gaps remain, notes our first editorial. Around a fifth of India’s farm households are tenants, often without formal documentation. Its largest fiscal implication concerns fertiliser subsidies, which exceed Rs 1.7 trillion annually. However, linking usage to crop records could reduce excess urea application and improve soil health. Pilot projects in Haryana indicate savings, and estimates suggest direct transfers could save Rs 30,000-40,000 crore, provided the database remains reliable and complete.

 

Meanwhile, the Supreme Court has cautioned against the unchecked expansion of government freebies, noting the strain on state finances. While affirming welfare obligations, it has stressed that support must be targeted rather than politically timed. The 16th Finance Commission has echoed these concerns. Power subsidies remain the largest component, with additional liabilities embedded in distribution company losses, highlights our second editorial. With public debt soaring, the Commission has called for clearer fiscal rules and a national consensus on defining merit subsidies and limiting expenditure, particularly in fiscally stressed states.

 

Writing on fiscal federalism, R Kavita Rao notes that the 16th Finance Commission has retained the vertical devolution share while altering the horizontal formula, creating state-level gainers and losers. Andhra Pradesh, Gujarat and Karnataka stand to benefit, while Uttar Pradesh and West Bengal may see slower growth in transfers. With debt levels already high in several states, the transition to the new framework, combined with performance-linked “challenge mode” funding, could intensify borrowing pressures even as a 3 per cent deficit ceiling remains in place.

 

Rajeev Kher and Anshuman Gupta turn to trade policy, arguing that sustainability has become central to global trade governance. India once resisted linking environmental standards to trade rules, but developed economies now embed such provisions in agreements and regulations. Measures such as the European Union’s Carbon Border Adjustment Mechanism are already affecting steel and aluminium exports. The authors contend that disengagement is no longer viable, and India must instead help shape multilateral sustainability norms that balance development needs with emerging market-access conditions.

 

Finally, in his review of Indira Gandhi and the Years that Transformed India, Amritesh Mukherjee writes that Srinath Raghavan presents the Emergency as the culmination of a longer centralisation of authority. Gandhi’s consolidation of power weakened party and institutional constraints, fostering what the historian terms “Caesarism”. Although voters later reversed course, the review argues that the deeper legacy was the normalisation of personality-driven politics, a pattern that remains relevant to contemporary democracy.

 

Stay tuned!