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BW Businessworld

Scanner On Fuel, Food...

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The survey on Thursday suggested reform measures to reduce off-budget expenditure in petroleum, fertiliser and food.

“Reform petroleum, fertiliser and food subsidies to reduce leakages so that the needy gets the intended benefits,” the survey today said.

“There is a merit in reviewing their (subsidies) impact vis-a-vis cash transfers that are targeted,” it said.

Calling for a decontrol of fuel prices, the policy document said, “It is imperative that buyers are aware of the opportunity cost of oil imports.”

The survey said, “Decontrol petrol and diesel prices. Develop a policy response system and financial buffer for use when diesel prices rise above the oil equivalent price of $80 a barrel.”

It said LPG subsidy should be for 6-8 cylinders per annum per household.

Kerosene subsidies need to be phased out by ensuring that every rural household (without electricity and LPG connection) has a solar cooker and solar lantern.

On fertiliser subsidy, the survey said the support should be given to farmers and not to producers.

Besides, subsidies should be based on nutrients, and freedom given to producers to set the prices of formulations with different mix of nutrients.

The survey proposed food coupons for the poor to prevent the diversion of foodgrains.

“It may be useful to introduce food stamps/coupons which will be valid outside the PDS outlets once the markets get better integrated. Food coupons will allow the consumers a wider choice,” it said.

Courtesy: The Telegraph