25 October, 2020

A Shadow Looms Over Rebate Raj

Hard-nosed economics guides the Kelkar report. But will politics let reason rule?

Food for thought A woman cooks in Jahangirpuri, Delhi
A Shadow Looms Over Rebate Raj

Fisc Vs Subsidies

Ideas put forth by Kelkar may lose to poll compulsions

  • Fuel, fertiliser and food form the bulk of subsidies government is desperately trying to reduce
  • Food subsidies will of course go up when the UPA’s landmark Food Security Bill is put into operation
  • The legislation has seen many changes in how much foodgrain is supplied to whom. The final decision is to be taken by year-end.
  • The Vijay Kelkar report argues that government has to prioritise between food security and other subsidies like fuel and fertilisers
  • As UPA sees the Bill as crucial for prospects in 2014, expect politics—not economics—to rule the roost


No heated debate on subsidies is ever really conclusive, embroiled as it is in votebank politics, economics and the needs of poor (in that order). This is evident in the way subsidies in fuel and fertilisers are being doled out—sadly, the rich and not-so-poor benefit more than the...



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