Before going off the topic of food and commodities management and
inflation7
, it should be put on record that, even apart from the connection of
commodities with inflation, this is a topic of considerable importance in itself. A
lot of our basic commodities—foodgrains, kerosene and LPG, for instance—are
supported through government subsidies. This is as it should be in a developing
economy. The idea is that the poor need to be specially aided to get access to
these critical items. However, most of this debate turns on the fiscal viability of
the subsidy. What this misses out on is that how we administer this subsidy has
huge implications for efficiency, even when it is fiscally neutral