WASHINGTON: India has urged the World Bank to avoid a singular and narrow view of subsidies and to differentiate between distortive subsidies and targeted support to the vulnerable households.
“On subsidies, we would like the Bank (World Bank) not to take unidimensional view of agricultural, fisheries and fossil fuel subsidies. It is important to differentiate between subsidies that are distortive and wasteful and those that are targeted to support the low-income households,” India’s Finance Minister Nirmala Sitharaman at the joint World Bank-International Monetary Fund’s Development Committee meeting during the Annual Meetings 2022.
All subsidies, or State’s support, are not the same; there are many types of subsidies aimed at different sections of society. While “distortive subsidies” could be driven by protectionism or nationalism and a desire to give advantage to select few companies and industries, “target support” is utilised with a welfare agenda, with a quest to reach the most vulnerable in society.
Giving India’s example Sitharaman said the Government of India, under the Pradhan Mantri Ujjwala Scheme, is providing free LPG connections ensuring that women in India have incentive to switch to clean cooking gas. This has improved India’s performance on SDGS 3, 5 and 7, she said.