The Hindu Business Line : ‘Direct transfer of subsidy to buyer is better option’

Study recommendations: (From left) Prof Abhijit Sen, Member, Planning Commission; Mr B.V.R. Mohan Reddy, Chairman, CII, Southern Region; Mr Manikam Ramaswami, Chairman, CII, Tamil Nadu; and Mr S. Ramasundaram, CMD, TIDCO, at the annual meeting of CII Tamil Nadu, in Chennai, on Monday. -

Our Bureau

Chennai, March 2 Direct transfer of subsidy to beneficiaries is a better option than market intervention to keep prices commodity prices down, according to Prof Abhijit Sen, Member, Union Planning Commission.

Addressing a conference by the Confederation of Indian Industry on social issues, Prof Sen said that in areas such as the Public Distribution System, which was “horrendously expensive”, there is a need to transfer subsidy to the buyer. This will give him the purchasing power to buy food at market rate. This way the government will avoid artificial drop in prices for the farmer.

Pvt expertise will help

But the transfer of subsidy will have to be effective, for which the private sector expertise can be brought in to develop an efficient mechanism, he said.

Similarly, in areas of healthcare and water management, private entrepreneurship can support development of efficient systems and introduction of technology to enhance efficiency of water use, especially in agriculture.

The theme of the Eleventh Plan has been inclusive growth but “that does not come without cost.” The economic scene last year was buoyant when the Government hiked allocation to healthcare and education in line with long-term vision. But in the current context of a slowdown, Government’s revenue is being hit and innovative approaches were needed to sustain plans in the social sector, he said.

The role of private sector in partnering with the public sector in areas such as education, healthcare and food gains greater significance. The industry and government need to work together, he said.

Areas of concern

Mr Manikam Ramaswami, Chairman, CII Tamil Nadu, said the conference, Tamil Nadu@75 - six transformational, highlights the areas of healthcare for all, equal opportunities in education and skill development, insulation from inflation for the vulnerable sections of society, balanced industrial development, mechanisation of farming and post harvest infrastructure and conserving urban environment. These have been identified by the CII as areas of concern for the sustained development of the State.

The CII was convinced that the State Government has to attract one ‘big ticket investment at any cost’ to the southern districts to ensure development of the region, he said.

Mr S. Ramasundaram, Chairman and Managing Director, Tamil Nadu Industrial Development Corporation, referring to efforts to boost industrialisation of the Southern districts, said investor were reluctant to go beyond Madurai because of concerns of connectivity.

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