By IANS,
Hyderabad : The Confederation of Indian Industry (CII) Tuesday backed the idea of containing subsidies to two percent of the Gross Domestic Product (GDP).
The CII national council, which met here, felt that subsidies need to be cut for fiscal consolidation as the deficit is too high to be sustainable.
CII President Adi Godrej told reporters that the industry body was comfortable with the government’s proposal in the budget that the subsidies should be contained at two percent of GDP.
“In the long term, the subsidies are not the way to go. In short term, they may be required but subsidies should not continue for ages together. We require containment and improvement,” he said.
He believes subsidies tend to move if nothing is done. “They also lead to wasteful use of resources. If you get free electricity clearly it may be wasted. We must contain subsidies,” he added.
Backing the proposal of decontrol of diesel prices, Godrej said if something was overly subsidised it was sometimes wastefully used and it may be overused. “Heavy subsidy on kerosene is leading to its adulteration with diesel. There are many such misuses.”
Asked about scams like 2G and mining affecting investment sentiments, he said the CII had made two suggestions to improve governance.
The CII has called for the need to bring a legislation like Lokpal to see that people who indulge in wrong-doing are exposed and punished.
“That is not enough. The government should have a system where there is minimal case-by-case approval so that opportunities for corruption come down dramatically. It could help tremendously if most interactions between governments and business and common people are done through the Internet. The contact between the government servants and people would be minimized and this would bring down corruption,” he added.