While food, fertiliser and kerosene subsidies can be "justified on the perfectly legitimate grounds," the same cannot be said for the "across-the-board" subsidies.

Pant also laid emphasis on subsidies to be "closely targetted and transparent." Further, "the subsidy regime should be simple and easy to administer. This is important to prevent leakages and to avoid generating opportunities for corruption."

The fourth point was that of financial liability of subsidies which "must be known and fixed. As things stand, almost all our subsidies, both open and implicit, are open-ended in the sense that there is no ceiling fixed on the expenditure that can be incurred in this regard. Thus, any change in cost automatically results in an increase in the subsidy burden."

The fifth point the plan panel chief emphasised was that all the "existing subsidies which do not conform to the above four criteria will have to be completely stopped." The final point pertained to the regular review of subsidies, "preferably with the involvement of independent agencies and civil society participation," so that the one which have ceased to serve any useful purpose can be phased out.

Even if a subsidy regime based on sound economic and social considerations is to be evolved, certain prerequisites need to be fulfilled for successful implementation, Pant said. "First and foremost there has to be a consensus among different states and among different political parties on shunning populism and adopting a sensible user-charges policy. In the absense of such a consensu, it may be difficult for a few willing states in isolation to go ahead."He, however, expressed optimism that "the present environment is conducive to the implementation of a sound subsidies policy."

Former cabinet secretary TSR Subramanian said that subsidies are inevitable, but the targets have to be identified specifically. The need of the hour is transparency, efficieny in the delivery system and proper targetting, he said.

The government should be encouraged to develop an information framework on subsidy policy, Assocham president KP Singh said. u