The Hindu : National : Efforts on to ensure subsidies reach poor: Chidambaram

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Wednesday, Feb 09, 2005

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Efforts on to ensure subsidies reach poor: Chidambaram

By Our Special Correspondent

NEW DELHI, FEB. 8. The country's rural poor can look forward to deriving greater benefits from the subsidies intended for them from the new fiscal as the UPA Government is striving to devise ways to target them better by making such sops transparent, according to the Finance Minister, P. Chidambaram.

Mr. Chidambaram said the best way to ensure that the benefits of well-designed subsidies reached the intended beneficiaries was to pay out the subsidy at the retail point. Addressing the parliamentary consultative committee attached to his Ministry, he made it clear that there was no question of cutting down the subsidies intended for the poor. This was due to the fact that providing the minimum consumption entitlements to the poor by subsidising the essential items consumed by them was an extremely important welfare dimension of government expenditure.

Subsidies, the Minister said, could correct the under-consumption of goods with positive externalities and reiterated that the Government was committed to fulfilling its responsibility towards the welfare of the poor and the downtrodden.

Referring to the UPA's National Common Minimum Programme, Mr. Chidambaram said the working document made a commitment to target government subsidies at the poor and the needy such as small and marginal farmers, farm labour and the urban poor.

In this regard, his Ministry had commissioned a study by the National Institute of Public Finance and Policy.

Based on the study a report outlining some policy issues was presented to Parliament on December 23 last year for generating an informed debate on the subject.

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