My views on F3 (Fuel-Fertilizers-Food) subsidies:
(1) Remove subsidies on all fuel items (diesel, kerosene and domestic LPG) as they distort energy prices, spoil environment (through mixing kerosene and diesel with petrol) and lead to non-optimal allocation of resources and irrational choice of technology for automobiles and public transport. Improve public transport and infrastructure and distribute smart cards to targeted group of poor and vulnerable sections of the society for purchase of fuels at market determined rates. However, all these cannot be done overnight and we need well planned phased program for abolition of all fuel subsidies within five years.
(2) Also remove fertilizer subsidies to the producers and importers, rather distribute smart cards to small and marginal farmers through the village Panchayats for purchase of fertilizers at market determined rates.
(3) Food subsidies cannot be abolished as the government has the basic responsibility for ensuring food security and nutrition for all. However, there has to be a limit on food subsidies and there is need to target the subsidies to the needy and vulnerable sections of the society. The present public distribution system with inefficient procurement, handling, storage, transportation and distribution of foodgrains by the Food Corporation of India needs significant rationalization and improvement.
(4) However, there is nothing wrong about agriculture subsidy (including fertilizer, power, seeds, interest subsidy) if it is managed properly, because they dampen food prices and increase food production. Let me indicate a few facts about agriculture subsidies in the development countries. According to an estimate by UNDP, annual agricultural subsidies of developed countries are many times their external aid. An average cow in the European Union received a subsidy of US$2.2 a day in 2004, while 767 million poor in the Asia and Pacific accounting for 21 per cent of their population lived on an income less than $1 per day and 48 per cent earned less than $2 per day. In 2002 US cotton producers received a subsidy of $2.9 billion which was more than entire GDP of Lao PDR or of Cambodia.
(5) The fact is that agriculture accounts for less than 10 per cent of external trade and less than 5 per cent of GDP and employment in the developed countries, which provide huge subsidies for agriculture. Then, what's wrong for India, which provides much less subsidies for agriculture but where agriculture accounts for almost 20 percent of GDP and external trade and provides employment to 60 per cent of the labor force?
Tarun Das, Ph.D.
Technical Expert (Linking Planning with Budgeting)
Multi-Donor Funded Project on Strengthening Financial Accountability
Ministry of Finance, Government of Bangladesh, Dhaka-1000.
Formerly: Economic Adviser, Ministry of finance,
and Planning Commission, Government of India.
Google Search: Tarun Das, Economic Adviser
Date: Mon, 4 Jun 2012 14:58:35 +0530
Subject: Re: [MTC Global] Fuel subsidy- Feeding the Rich
From: drjaganmohanreddy@gmail.com
To: join_mtc@googlegroups.com
We should think of such steps which will not only save our fuel expenses but at the same time help us in averting/arresting price rise of essential commodities.Say for instance:
- Govt,in public-private partner ship, improve public transport where by people are encouraged to avoid using own vehicles,thereby bringing down pollution[enjoyed travelling to electronics city in KSRTC bus from Anand Rao circle]
- Improve governance.In my view this is at the core .If we all can build up a momentum in this direction definitely[How Hegde saab could succeed in dislodging from his seat] things improve.
- Inculcating the values of control[anger,ego etc]concern and care in young managers/students.This,called development consciousness,one when pursued vigorously will yield very good results to the whole society.
- regards
- Dr A Jagan Mohan Reddy
Associate Professor (HR) & Placement Coordinator
Institute of Public Enterprise,
Osmania University Campus,
Hyderabad - 500 007
Ph.No. 040-27095483 / 9392414243
Hands that serve are holier than the lips that pray
Agree with Mr. Nagaraja K
To Mr. Maanish:
Sir, I don't think that is a practical solution.
Just think, if food prices go up, can we stop eating?
Transportation is as essential as food in today's world. I am responding since you asked.
With Warm Regards,
Ananda Reddy
Founder Director
ACE Institute for Creating Excellence
33, 1st Main, Sheshadripuram,
Bangalore: 560020
Ph: +918147092023
email: anand@ace-institute.com
URL: www.ace-institute.com
Date: Sun, 3 Jun 2012 21:04:05 -0700
From: maanish_chava@yahoo.com
Subject: Re: [MTC Global] Fuel subsidy- Feeding the Rich
To: join_mtc@googlegroups.com
How much money has the government earned in the last week since the fuel prices have increased? My sincere suggestion to all : STOP BUYING TWO AND FOUR WHEELERS.... ZERO SALE MEANS HUGE LOSSES FOR THE MANUFACTURERS... THESE BIGWIGS WILL THEN PRESSURISE THE GOVENRMENT TO REDUCE THE FUEL COSTS.... ? What do you say.......From: NAGARAJA K <nagrajkk@gmail.com>
To: join_mtc@googlegroups.com
Sent: Monday, June 4, 2012 9:10 AM
Subject: Re: [MTC Global] Fuel subsidy- Feeding the Rich
Subsidies have to go. Instead the government shall take steps to improve the purchasing power of all sections of people. That is real governnance.
Nagaraja K
On Sun, Jun 3, 2012 at 9:11 PM, <krishankhanna.iit@gmail.com> wrote:
Problem is of buying votes with tax payers money.
Sign of poor Governance.
Krishan Khanna
Sent from BlackBerry® on Airtel
-----Original Message-----
From: "bnath.dutta@gmail.com" <bnath.dutta@gmail.com>
Sender: join_mtc@googlegroups.com
Date: Sun, 03 Jun 2012 15:21:46
To: join_mtc@googlegroups.com<join_mtc@googlegroups.com>
Reply-To: join_mtc@googlegroups.com
Subject: [MTC Global] Fuel subsidy- Feeding the Rich
There is no other country except India has LPG subsidy. Even in Bangladesh, there is no such subsidy. where is the problem, then ?
Cordially,
Bholanath
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