February 28, 2003, Chandigarh, India
Subsidy reprioritisation needed
New Delhi, February 27
Expenditure on major subsidies is budgeted at Rs 38,923 crore in 2002-03 as compared with an expenditure of Rs 30,094 crore in 2001-02.
The subsidies budgeted in the current year absorb nearly 16 per cent of the net revenue of the Centre and constitute 11.4 per cent of the total revenue expenditure.
Expenditure on major subsidies, which constituted 1.7 per cent of the GDP in 1990-91, had come down to 1.0 per cent of the GDP in 1996-97. Thereafter it stabilised at around 1.2 per cent of the GDP.
The survey pointed out that expenditure on major subsidies budgeted in the current year constituted 1.6 per cent of the GDP.
With the dismantling of the administered price mechanism for petroleum products from April 1, 2002, the Budget for 2002-03 made an explicit provision of Rs 6,495 crore towards payment of subsidies for domestic LPG, kerosene supplied through the public distribution system and freight subsidy for remote areas, the survey said.
“Wages, salaries, interest payments and subsidies account for a predominant share of government expenditure. It needs to be prioritised by pruning untargeted subsidies and exercising utmost economy in wages and salaries”, the survey said.
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