When the government freed petrol prices from decades of artificial pricing, we imagined that India’s policy mandarins had at last discovered the virtues of pragmatism. Subsidies in India do little other than help the corrupt get rich, while the poor are given short shrift. In this respect, Monday’s announcement of a task force to formulate the technology to better deliver subsidies is a welcome step.
But the formation of the task force now raises questions about whether the government ever gave thought to implementing the recommendations of the many committees that have dealt with kerosene, LPG and fertilizer pricing in the past. And a bigger question remains about the outcomes of subsidies, from market distortions to unscrupulous actors. The task force may be able to find a way around the latter. The proof of the government’s reform intentions, however, will lie in its implementation of the committee’s recommendations.