Cash, not subsidy, will do ryots good 8212; Study

CHANDIGARH, June 13: With subsidy on electricity and water to farmers coming to around Rs 7,450 per cultivator, the Punjab farmer could w...

CHANDIGARH, June 13: With subsidy on electricity and water to farmers coming to around Rs 7,450 per cultivator, the Punjab farmer could well be paid this amount and weaned away from paddy cultivation. This way, the politician would have lived up to his election promise, the burden on the Gross State Domestic Product GDSP would be reduced, and lesser paddy cultivation would mean reduced ecological degradation.

The new mantra comes from a document prepared for the Punjab Government on the extent of subsidies in the State and their consequences. The study, by economist Gian Singh Sahota, follows the budget proposal of the Punjab Finance Minister, which suggests a target reduction of subsidies at an annual rate of 15 per cent.

The study reveals that the agricultural sector accounts for nine per cent of the GSDP, and subsidies, it adds, aggregate to Rs 7,853 crore or 15.92 per cent of the GSDP. Of this, about Rs 1,650 crore comes from the Centre.

The report is very critical of some schemes, which it saysare not funded properly. Old-age pension, for instance, which has an expected annual bill of Rs 120 crore, has been instituted without any tax.

Further, quot;until recently, farmers were implicitly taxed to subsidise urban home-owners through the process of acquisition of their land for urbanisation,quot; says the report. On expenditure on scholarships and stipends, which amounted to Rs 32 crore in 1996-97, the report says the bulk of this subsidy goes to the affluent.

A sector-wise analysis reveals industry in Punjab accounts for Rs 1,321 crore in terms of subsidies, while agriculture accounts for a little over Rs 4,500 crore. Public sector undertakings have a share of nearly Rs 1,380 crore and poverty alleviation programmes another 650 crore. The report calls for a clear diversion of funds from subsidies to building infrastructure. It recommends that input subsidies such as capital subsidy to industry, agricultural machinery, tubewells, concessional interest rates to PSUs and cross subsidisation of inputselectricity tariffs and acquisition of land ought to be reformed.

The report talks about populism too. quot;If a mass leader like Chief Minister Parkash Singh Badal cannot dam the tide of subsidies in the year of the tercentenary, it will be a will-o8217;-the-wisp to expect a future Partap Singh Kairon to be born in the times to come. For, an eradication of competitive populism is a job neither for a weak party nor a timid leader.quot;