Search the Internet          Tips  Sites: Finance, Investment

Govt to cut subsidies in phased manner: Jaswant

The government on Saturday ruled out dispensing with Minimum Support Price scheme for agricultural crops even as it said measures would be taken to reduce subsidies "step-by-step".

"MSP will not go. It will not end," Finance Minister Jaswant Singh said, adding that the Centre will work in tandem with the state governments for better targetting of subsidies.

Indicating that softer interest regime will continue, Jaswant Singh said measures to boost savings would be taken.

The government would also strengthen the equity cult, Singh told reporters after the meeting of the Prime Minsiter's Economic Advisory Council where an eight-point agenda was unveiled to achieve eight per cent growth.

The finance minister did not subscribe to the view that reduction in interest rates would lead to lower savings levels.

Describing the council meeting with economists as instructive, Singh said: "Very good ideas were thrown up for improving the general state of the economy and pushing reforms."

Though the meeting was convened to discuss Electricity Bill and Petroleum Regulatory Board, Singh said issues relating to non-performing assets of banks, fiscal responsibility, minimum price mechanism and rural credit were also discussed.

"Everything will be done step-by-step," the finance minister said adding, "things will fructify at the right time." He, however, declined to give further details.

Asked if the government would be able to implement the 8-point agenda set by the prime minister, Singh said it was the responsibility of the government to implement the policies.

Singh said: "When the prime minister sets any targets or gives any direction there could be no question mark on what the PM says. It is the responsibility of the government to achieve it."

Petroleum Minister Ram Naik and Power Minister Suresh Prabhu, who attended the meeting, said participants by and large welcomed the content of the Electricity Bill and the Petroleum Regulatory Board and made valuable suggestions.

Prabhu said: "Nowhere in the world power sector regulations have gone on any one model and we are in an evolutionary stage."

Prabhu was of the view that the regulatory mechanism needs to be strengthened and more autonomy should be given to the regulators who would be selected from among the best and in a transparent manner.

He also said some members wanted the government to come out with an integrated Energy Policy.

Welcoming the initiatives of the NDA (National Democratic Alliance) government, energy expert R K Pachuri said there is a need to take a hard look at the institution of independent regulatory system and ensure that it is adhered to right from the beginning.

"Adequate importance should be given to the development of infrastructure without which the government will not be able to achieve 8-9 per cent growth," he said adding the ministries should work in a cohesive manner to enable effective implementation of policies.

Economist Ashok Lahiri said indications of revival of the economy were already there in the last two quarters, which needed to be consolidated.

"There is a need to improve credit delivery system and steps should be taken to make the market and regulations both vibrant," he said.

Jagdish Shettigar of Bharatiya Janata Party 's Economic Cell said it was necessary to sustain the economic recovery trend and for this agriculture sector should be given due emphasis.

He said it was essential to implement the various programmes announced by the government during the last four years.

ALSO READ:
More Money Headlines