To attract investments and achieve high economic growth, it is necessary to rationalise subsidies and have stable economic policies, according to Union Finance Minister Arun Jaitley.
"From 1 January, LPG subsidy is going through banks...We have to gradually rationalize all possible subsidies," said Jaitley, while addressing an event organised by the Confederation of Indian Industry (CII) in Chennai, reports PTI.
His comments are significant, given that they come just ahead of the Union Budget for 2015-16 to be presented next month.
In his maiden Budget presented last year, Jaitley had set up an Expenditure Management Commission headed by former RBI governor Bimal Jalan. The Commission is reported to have submitted interim recommendations on measures to be taken to rationalize subsidies and public expenditure. Its recommendations are likely to be incorporated in the forthcoming Budget.
The government's subsidy bill towards oil, fertilizers runs into trillions of rupees.
The finance minister also said that stability in taxation and related policies will enable India to attract foreign capital.
On proposed changes to the land acquisition act, Jaitley said that the farmer would eventually benefit from improved returns he receives for his land, and argued that rural infrastructure and industrial corridors would result in fetching enhanced prices for rural land and create jobs.
