Rationalisation of Central Explicit Subsidies in India

Abstract

It is very important to keep a track of subsidies provided by the Central Government as well as major state governments to understand the allocation of funds and the flow of funds to the intended beneficiaries over the years. This paper aims to study the changing trends in the distribution of major subsidies by the central government from 2010 onwards. It examines in detail three major types of subsidies, viz., Food Subsidies, Fertiliser Subsidies and Petroleum Subsidies at the level of Government of India. It studies the possible reforms measures taken by GoI to rationalise the burden of explicit subsidies. It looks at the role of technology in implementation of subsidies so that it reaches the beneficiary.  This paper studies the changing trends in allocation of subsidies by the central government after 2010 onwards giving an insight in the government utilization of resources for public welfare. This paper wants to present an outline of technological interventions through cash transfers and direct benefit transfers adopted by GoIthat can create a new paradigm in managing the expenditure of Government. Taking into account learning’s from current efforts by Central Government and use of technology will help India to achieve its stated outcomes and proper utilisation of subsidies to the right beneficiaries.