Budget 2012 must strike a balance between revenue and expenditure
We need a tax signal more than a fiscal one

Economy Mar 16, 2012

The Frankenstein called subsidies

By Firstbiz Editors

Whether it is food, or fuel or fertilisers - the 3Fs for the FM - the subsidy bill has, through benign political neglect, burgeoned into something frightening over the last eight years.

AFP

If food can't be touched due to its political sensitivity, setting right the fiscal deficit - which is the fourth frightening 'F' in the equation - needs reform in fertiliser and fuel pricing.

In fertiliser, clearly the nutrient-based subsidy reform needs to get to urea, and in fuel, diesel price deregulation is an important change to make.

Firstpost talked to several economists and asked them how the government should tackle this tricky issue.

See Firstpost's Budget 2012 videos and expert views: Ajay Shah, Rupa Rege Nitsure, Indranil Pan, Ashima Goyal, Jim Walker, DK Joshi, Ajit Ranade, Art Woo.

See Firstpost's Budget 2012 issue based videos: Subsidies, Fiscal Deficit, Inflation, Taxation.

by Firstbiz Editors

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