Economic Survey 2016 points out that there may be 'substantial leakages' from the government's exchequer since the current level of subsidies may be an underestimation.
Economic Survey 2015-16 hinted at phasing out of subsidies to the “better-off”. It points out that there may be “substantial leakages” from the government’s exchequer since the current level of subsidies may be an underestimation.
“Addressing the interventions and rectifying anomalies may be good not only from a fiscal and welfare perspective, but also from a political economy welfare perspective, lending credibility to other market-oriented reforms,” the Economic Survey has said.
It says that there has been “uneven distribution of Rs 100,000 crore subsidies going to the better-off merely on account of 6 commodities like gold, LPG, Kerosene, Electricity, railway fares, aviation and turbine fuel (ATF) plus the Small Savings Scheme.”
The survey, tabled by Finance Minister Arun Jaitley said that the current subsidy figures may be an underestimation.
“The total amount given as subsidy is no less than Rs 91,350 crore not to forget that this is an underestimate of the actual subsidy to the better-off because of the underestimation of the consumption by the rich,” the survey says.
It says that if subsidies inherent in just the Public Provident Fund (PPF) schemes are taken, the total subsidy to the well-off amounts to above Rs. 1 lakh crore.
The Economic Survey has said that this represents substantial leakage from the Government’s kitty “and an opportunity foregone to help the truly deserving.”