It doesn’t require much thought to understand that subsidies in India are today driven by political expediency and their economic case was exhausted decades ago.
They still would not cause heartburn if they did not “leak” to those who don’t deserve them. Power subsidies are the best example of this problem. These mostly benefit rich farmers who don’t need them anyway.
A proposal by the Planning Commission to hand them directly through a smart card linked to the UID number holds much promise. Given the nature of the commodity being consumed, power, it is much more feasible to calculate and distribute this subsidy than in the case of other goods.
If the government gets this right, it could serve as a template for disbursing subsidies in many government schemes. The key thing here is to learn lessons in its implementation.
The proposal should be implemented quickly.