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Sinha warns of 'hard decisions'; says subsidies to go

Finance Minister Yashwant Sinha said 'hard decisions' are now necessary for India to survive in the competitive global economy and hinted that the government will soon weed out unmerited subsidies.

"Inefficiencies of the system are hidden in the garb of social obligations", Sinha said while speaking at the seventh annual day function of the National Institute of Financial Management in Faridabad on Monday. The NIFM is an autonomous organisation of the ministry of finance set up with a view to developing itself as a centre of excellence in the area of financial management.

Sinha said the government will no longer provide subsidies to organisations for protecting their inefficiencies and added that whatever assistance needs to be given to institutions should be done in an upfront manner.

"Lot of inefficiency is camouflaged in the whole concept of subsidies".

In this context, the finance minister recalled the meetings of the council of ministers where the issue of closure of undertakings that cannot be revived often came up.

Referring to the burgeoning fiscal deficit, Sinha said this was also a manifestation of lot of inefficient and unproductive expenditure. There is widespread speculation that the government will far exceed its borrowing target for this fiscal.

''Ten years down the line, we would be discussing what new projects would come up. Strangely today, we are still debating which PSU's can be shut down,'' Sinha said.

''India was perhaps the last important country to join the bandwagon of economic reforms,'' he said and added it was important to convince the people that there may be hardships in the process of transition of reforms but in the long run everyone will benefit.

The substance of Sinha's remarks on the economy was that India not too distant in the future would be a world class economic juggernaut and this goal is possible to achieve by strictly adhering to the discipline of the market.

The finance minister exhorted the officers of the account services of the central government, who had completed their training at the institute to remain steadfast in their beliefs and convictions and render only correct advice.

He warned there would be times when they would be berated and their work belittled by arrogant bosses for fearless and well meaning advice given by them just because it did not suit them.

UNI

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