Effective Subsidy Delivery Mechanism

This editorial is based on “what commodities distribution of commodities should be distributed for free or at a subsidised level” was published in The Indian Express on 16/06/2022. It talks about wasteful expenditure occurs by the state by giving subsidies to non-essential goods and services, and how the state can utilise best practices to further enhance its delivery mechanism.

For Prelims: Food subsidies, PDS (Public Distribution System), DBT (Direct Benefit Transfer), PLI (Production Linked Index), Poverty, Fiscal policy

For Mains: Issues in the Implementation of Subsidy Distribution, Delivery mechanisms, and their fiscal implications

Recently, the Punjab government announced a subsidy scheme to provide free electricity up to 300 units, this sparked the debate around the subsidies and what are the essential goods and services that required the government efforts to reach the downtrodden section of society.

What are Subsidies?

What is the Delivery Mechanism for Dispersal of Subsidy?

What could be the Rationale for Selection of Subsidy?

Way Forward