The Expenditure Management Commission set up by the government to suggest ways to rationalise subsidies will submit its final report by December 2015, its Chairman Bimal Jalan said on Thursday.
“We are deliberating on rationalisation of subsidy. We will submit final report by the end of current calendar year,” Jalan told reporters after meeting Finance Minister Arun Jaitley here.
The government had set up the Commission under the former RBI Governor in August last year to suggest steps to reduce subsidies on food, fertiliser and oil and narrow the fiscal deficit.
“We are discussing with authorities how to minimise distortion,” Jalan added. The Commission had submitted its interim report in January and is mandated to submit the final one before Budget 2016-17.
Former finance secretary Sumit Bose and former RBI deputy governor Subir Gokarn are members of the Commission. The government has already introduced direct benefit transfer scheme to plug leaks in LPG subsidy and other welfare schemes to ensure the benefit reaches the poor directly.
Subsidy rationalisation is high on economic agenda of the government as it plans to cut down the fiscal deficit to 3.9 percent in the current year and further to 3 percent by 2017-18. In the past fiscal, the deficit was 4 percent of GDP.
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