PM concerned at rising fuel subsidy
With crude oil prices nearing $100 a barrel, Prime Minister Manmohan Singh expressed concern over mounting subsidies in petroleum as also food and fertiliser sectors, with discounts exceeding Rs 1,00,000 crore this year.
By PTI |
NEW DELHI: With crude oil prices nearing $100 a barrel, Prime Minister Manmohan Singh on Thursday expressed concern over mounting subsidies in petroleum as also food and fertiliser sectors, with discounts exceeding Rs 1,00,000 crore this year.
"We need to address the problem of mounting subsidies in food, fertilisers and now, in petroleum which is a recent phenomenon. Over Rs 1,00,000 crore are going to be spent this year alone on these three items," he said at the Full Planning Commission meeting to approve the draft 11th Five Year Plan.
While government sells foodgrains and fertilisers way below cost price, it has also not allowed oil companies to raise fuel prices despite rising cost of production and has been compensating them for their losses through issue of oil bonds - a sort of dole.
The Prime Minister asked his Cabinet colleagues and the Planning Commission to "reflect what these mean for our development options and what development options these subsidies are shutting out".
He asked whether such large outgo on subsidies mean "fewer schools, fewer hospitals, fewer scholarships, lower public investment in agriculture and poor infrastructure".
Singh said it was important to restructure subsidies so that only the needy and the poor benefit from them and all leakages are stopped.
"We need to address the problem of mounting subsidies in food, fertilisers and now, in petroleum which is a recent phenomenon. Over Rs 1,00,000 crore are going to be spent this year alone on these three items," he said at the Full Planning Commission meeting to approve the draft 11th Five Year Plan.
While government sells foodgrains and fertilisers way below cost price, it has also not allowed oil companies to raise fuel prices despite rising cost of production and has been compensating them for their losses through issue of oil bonds - a sort of dole.
The Prime Minister asked his Cabinet colleagues and the Planning Commission to "reflect what these mean for our development options and what development options these subsidies are shutting out".
He asked whether such large outgo on subsidies mean "fewer schools, fewer hospitals, fewer scholarships, lower public investment in agriculture and poor infrastructure".
Singh said it was important to restructure subsidies so that only the needy and the poor benefit from them and all leakages are stopped.
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