India: Montek Singh Ahluwalia Calls for End to Fuel Subsidy
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Wednesday, 06 March 2013 |
India's Planning Commission Deputy Chairman Montek Singh Ahluwalia has declared his support for the complete elimination of fuel subsidies. Speaking on the fiscal challenge facing the Government, Ahluwalia described the subsidy system in general as distortionary, while pointing out that other subsidies should be prioritised ahead of fuel.
"If there is a fiscal problem and we can't afford subsidy, we should cut the other subsidy, not the food security subsidy," he said. Ahluwalia added that fertilizer subsidy should be cut to half as it damaged soil nutrition, while domestic energy subsidies should be ended.
"Petroleum subsidy should just be eliminated soon, of course. It's damaging, it's unjustified, it doesn't help the poor ... petrol is normally consumed by upper income people," he remarked.
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