Public Distribution System: From its very first Budget, this government has repeatedly stressed the urgent need to overhaul the public distribution system — the poor and the lower middle class depend on it; leakages are phenomenal. At first Chidambaram declared that government would fly one sort of pilot — distributing food stamps rather than food. His way of dealing with the fact that nothing had been done was to declare in a subsequent Budget that government would fly another sort of pilot — distributing food with the aid of smart cards. In this, the final and sixth Budget of this government, we are told that an allocation has been made for this pilot — Rs. 1.1 crore to Chandigarh, Rs. 25 crore to Haryana, and Rs. 1 crore to the NIC to see how the pilot will fare. And this allocation, the Budget documents tell us, was made only on 26 December 2008! In the meanwhile, the leakages continue unabated and unchecked. That pattern holds for the black hole of subsidies as a whole.

SUBSIDIES: In his first Budget for this government, that for 2004-05, Chidambaram reminded Parliament, “Seven years ago, I placed before Parliament the first paper on subsidies.” They need to be sharply targeted, he said — a euphemism for saying that they were not reaching the intended beneficiaries. Hence, he took a decisive step: he announced another study of them!

Next year, in the Budget for 2005-06, Chidambaram reported the great progress he had made — the study had been placed in Parliament, he said. Subsidies are necessary, he said, “However, we must now take up the task of restructuring the subsidy regime,” he told Parliament, adding immediately the caveat that would constitute the anticipatory alibi for nothing being done — “we must now take up the task of restructuring the subsidy regime in a cautious manner and after thorough discussion.”

... contd.