Reboot subsidies

The government now aims to completely switch over from subsidies on food, fuel and fertilisers to direct cash transfer to the poor. If implemented in five years as planned, this would be a welcome shift which would sharply reduce poverty and also ensure fiscal correction. Spending on subsidies by the central government has shot up to a massive Rs 2,16,297 crore in 2011-12, about 2.41% of India's GDP.

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