Tag Archives: ‘breeds inefficiencies & distortions’

A National Committee (NC) under the Prime Minister has been constituted on ‘direct cash transfer’ of subsidy. Will this prove to be more potent than the present dispensation? What is wrong with the latter? The present system does not differentiate between rich and poor; breeds inefficiencies and distortions, undermines competition and gives an easy platform to all and sundry — producers, suppliers, traders — to make unjust gains. SUBSIDY REGIME Urea MRP is controlled at a low level unrelated to cost of supply, which is much higher. A differential amount is reimbursed to the producer as subsidy. It varies depending on source of supply, whether it is import or indigenous. Decontrolled P&K fertilisers, too, are subsidised. Unlike urea, all producers/suppliers...