Govt needs to gradually bring down subsidies: Raghuram Rajan

The government needs to gradually bring down misdirected subsidies and limit the benefits to needy persons, said Chief Economic Adviser to the finance ministry, Raghuram Rajan.

"Subsidies are difficult to tackle because people get use to that... How do bring down subsidy? We need to do it perhaps by small increment every time. But eventually we have to get to point where it is targeted to poorest of poor", he said at the Delhi Economics Conclave.

He further said: "Everybody thinks he is aam admi. So aam admi is affected by removal of subsidy. Of course they are affected. (If) you were to start removing subsidies, then should not you start by removing subsidies on richest people?". The government in the Budget had pegged subsidy outgo towards food, fuel and fertiliser at Rs 1.80 lakh crore for 2012-13. The amount is estimated to go up in view of various international and domestic factors.

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