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<b>Letters:</b> Wasteful subsidy

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Business Standard New Delhi

Apropos the edit “Get out of the kitchen” (March 5), the petroleum ministry’s concept of “single kitchen” can be easily gamed, given the arbitrariness of the definition, the process of voluntary declaration and the low-impact penalties. Since the value chain of domestic LPG is fraught with diversion and manipulation, the objective of social justice through energy subsidies can hardly be served. Growing income and purchasing power differentials make uniform subsidies wasteful. Also, the policy on a shared utility like domestic LPG must take a household-income approach instead of an individual-income approach. If scrapping the LPG subsidy is not feasible, then the government could consider measures like progressive reduction of subsidy with each additional cylinder refilled, followed by market-pricing beyond a certain cap.

 

Sudipta Das Kolkata

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First Published: Mar 07 2012 | 12:07 AM IST

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