The Reserve Bank of India (RBI) has asked States including Telangana to reprioritise their expenditure on subsidies being given to different sections for achieving long-term advantages by ensuring that beneficiaries get empowered permanently and forego such benefits.
The apex bank asked the States to ensure that there is a sunset clause for each social sector scheme. Reducing the quantum of subsidies by ensuring that only the deserving receive them will free up resources to invest in health, education, agriculture, R&D and rural infrastructure which will help create more jobs and reduce poverty on a sustainable basis, the bank said in its latest bulletin released recently.
The RBI said as per the latest available data from the Comptroller and Auditor General of India, the State Governments’ expenditure on subsidies grew at 12.9 per cent and 11.2 per cent during 2020-21 and 2021-22 respectively after contracting in 2019-20. Commensurately, the share of subsidies in total revenue expenditure by States has also risen from 7.8 per cent in 2019-20 to 8.2 per cent in 2021-22. There are stark variations among States at a disaggregated level though.
