Category: Pricing Policies & Subsidies

Freebies are a recipe for financial bankruptcy; the only way to avoid it is to prohibit political parties from promising them Hearing a public interest litigation (PIL), filed by advocate Ashwani Dubey, seeking directions against ‘freebies’—a euphemism for benefits distributed by political parties using public money for garnering votes—on August 3, 2022, the bench of Chief Justice of India NV Ramana and Justices Krishna Murari and Hima Kohli sought suggestions from all stakeholders. The stakeholders include beneficiaries and the people who are opposing these freebies, besides the government as well as organisations such as Niti Aayog, Finance Commission, RBI and Opposition parties, etc. The suggestions have been sought on the composition of a committee which can go into the issue...

Deficiency price payment  may be way forward as agri market forces are better placed to judge the value of agri products Addressing a conference on ‘Getting Agricultural Markets Right’ (July 6, 2022), Ramesh Chand, who is a Member of the Niti Aayog, proposed the adoption of deficiency price payment system (DPPS) as an alternative to the existing dispensation of procurement of crops from the farmers at minimum support prices (MSPs). What is the problem with the MSP-based regime? How will DPPS help in alleviating it? Under the existing system, agencies of the government like the Food Corporation of India (FCI) buy agri-produces such as wheat, rice/paddy, coarse cereals, from farmers at the MSP and distribute at a subsidized price of...

The Government should look at ways for pruning subsidy. Indeed, there is an unprecedented scope for it The Union Government has extended the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for a further period of six months till September 30, 2022. Having already spent over Rs 260,000 crore during the first five phases (the scheme has been in operation since April 2020, the fifth phase ended on March 31, 2022), it will need another Rs 80,000 crore during April – September, 2022. Is the extension justified? In March 2020, the Finance Minister Nirmala Sitharaman had announced the Scheme to mitigate the hardship suffered by people due to a major disruption in economic activity and resultant loss of jobs and income...

The demand for repeal of the Central laws is unwarranted. They open up multiple options that farmers can leverage for increasing price realisation While staying the implementation of the three farm laws enacted by the Union Government in January 2021, the Supreme Court had hoped that this would create a congenial atmosphere for the protesting farmers to come to the negotiating table and arrive at an amicable settlement. However, the purpose is far from achieved as certain farmers’ bodies are insisting on ‘repeal’ of the laws. This is overshadowed by yet any other demand that the Union Government should guarantee a minimum support price (MSP) backed by a law enacted by parliament. As the wording suggests, MSP is the minimum...