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Food subsidy could also be dubbed loss: PM

PM Manmohan Singh disputed the estimates of huge loss from the spectrum swindle by citing the subsidies given to the poor on food and kerosene in his interaction with the media on Wednesday.

Responding to a question on whether he agreed with telecom minister Kapil Sibal that there was zero revenue loss on 2G, he said there could be no opinion on such an issue, stressing that many consider the amount spent on subsidies on food and kerosene as loss. "I am not in a position to say that there is a foolproof method in which one can determine the extent of the loss. It is very much a function of what is your starting point. And also depends upon our opinion," he said.

"We have a budget which gives subsidy for food, Rs 80,000 crore per annum, some people may say these foodgrains should be sold at market prices. Will we say then... because they are not sold at market prices, because you are giving them a subsidy, it is a loss of Rs 80,000 crore," he added.

Singh went on to give the example of subsidy on kerosene. "We subsidise the price of kerosene to an extent which is greater than many other subsidies, that imposes burden on our oil marketing companies, should we say then that ... that there is loss of revenue."

Many felt that the long explanation that came towards the end of his media interaction had shades of Raja's claim and opinion of others that auctioning of spectrum would have made telephone calls costlier, hindering government's attempts to expand teledensity. However, Singh did not say so specifically.

He argued that CAG too had called it a presumptive loss and therefore estimates of loss depended on the assumptions one made.