In the aftermath of a wave of reforms (more correctly
incremental reforms), P. Chidambar said his government now gives more emphasis
on quality of expenditure. Its welcome. In an effort to reduce fiscal deficit government
now wants to reduce unnecessary
subsidies which according to them are fertilizer, oil, though this have been challenged by IIM-A
professors and C. P. Chandrasekhar and Jayati Ghosh
( here,
here).
Kelkar also recommended the same. It’s a step in right direction. But how
justified is subsidizing the rich people who travel in Air India? Why does not government
withdraw itself from this sector which private parties would welcome? Does not
this reduce fiscal deficit? Whose interest it is serving? Is it seriously
trying to increase quality of the expenditure? What would Mr. Kelkar and newly
appointed chief economic advisor Rahuram Rajan, who also wants to see fiscal
deficit reduced (read reducing subsidies) to the finance ministry say?
The Empowered Group
of Ministers has recommended that all telecom companies with more than 4.4
gigahertz of spectrum are to pay a one-time fee for it. Lo and Behold, MTNL and
BSNL want to the government
to pay one-time spectrum fee for it. It means government has to pay Rs
11,000 crore subsidy.
The
loss figures for BSNL is Rs 8,800 crore in 2011-12, and for MTNL it is Rs
4,100 crore.
Who will pay these losses? Aam aadmi, for whom the
government is so much concerned about? How will the government raise this staggering
amount? From trees? Surely, money does not grow on trees, as our prime minister often
argues.
We have always heard government talking of selling PSUs or
disinvestment. The government seems to sell profit making PSUs. But why does
not talk about selling of MTNL and BSNL?
Will the government encourage poor quality of expenditure???
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