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Chief Economic Advisor Arvind Subramanian on Sunday said under-cultivation of pulses and their inadequate production have led to spike in prices, but vegetable prices have more to do with market forces than production.
Besides, there has been a shift in dietary habit in which pulses have become core of food habits among the Indian people, but there was inadequate production to meet the demand, Subramanian told an international conference here.
Under the circumstances, cultivation of pulses has to be increased to meet growing domestic demand, he said, adding the Centre has taken note of this and incentivised pulses’ cultivation by raising the Minimum Support Price (MSP), besides taking other measures to encourage the farmers to produce such crops on preferential basis.
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Technology should have been put to better use to enhance cultivation of pulses’ crops, he said.
In the backdrop of surge in tomato price, he said fluctuation in vegetable prices was linked to market forces rather than cultivation.
The markets should be made better to stabilize vegetable prices, he said.
Subramanian also spoke on the need for strengthening the State’s role in bridging fiscal relations between the rich and poor people and regretted low fiscal capacity of the country due to unusually low base of tax payers.
The ratio of voters to tax payers in the country stands at four per cent, but it should be 23 per cent for a country at its level of economic and political development, he said and suggested not increasing exemption limits could be a possible solution to augment fiscal capacity.
As a legitimate tool to reduce gap between the rich and poor, the State should build a legitimate mechanism under which there should be delivery of public goods for all, but the bounties for well offs must be reduced and they should be taxed regardless of source of income, Subramanian said.
Stating that the state is spending Rs 76,000 crore on the well offs by way of subsidy on kerosene (Rs 1,857 crore), railways (Rs 3,122 crore), electricity (Rs 26,370 crore), LPG (Rs 28,219 crore), gold (Rs 3,785 crore), aviation turbine fuel (Rs 762 crore), small savings (Rs 11,900 crore), he suggested such dole outs should be done away with.
He also emphasised on spreading JAM, (Jan Dhan-Aadhaar- Mobile) for financial inclusion of the poor people and said the government is moving in the right direction by spreading Jan Dhan and Aadhaar by creating three lakh and five lakh accounts respectively per day in 2015.
He said the Direct Benefit Transfer (DBT) in LPG was a big success.