Federation of Indian Chambers of Commerce & Industry (Ficci) president G P Goenka said the finance minister has to take a holistic view on subsidies since the total quantum of subsidies have risen to a staggering level of 14 per cent of gross domestic product (GDP).
In a statement issued here yesterday, the Ficci chief said, "While pruning down the expenditure, the government has to take a careful view on what constitutes the merit and non-merit subsidies."
"It is the considered view, cutting across political party lines, that all non-merit subsidies have to be phased out in a systematic manner so as to eliminate the wasteful expenditure of the government," a FICCI statement quoting him said.
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Goenka expressed hope that the expenditure commission would objectively look into the issue and take corrective measures.
He also said the finance minister's decision yesterday to refer the whole gamut of issues related to subsidies on urea, LPG and foodgrain sold through the public distribution system (PDS) to the expenditure commission is a step in the right direction.
However, the Confederation of Indian Industry in a statement lauded the passage of the Finance Bill in the Lok Sabha.
The chamber complimented finance minister Yashwant Sinha for not succumbing to political pressure to roll back the proposed subsidy cuts.
"CII believes that this was a bold decision and was indeed necessary in the light of the serious fiscal situation facing the government," the statement said.