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Congress party to oppose rice subsidy cut

NEW DELHI: India's main opposition Congress party will oppose in parliament the government's proposed cuts on subsidies of rice sold through the public distribution system, Press Trust of India (PTI) said on Monday.

PTI quoted Priyaranjan Das Munshi, Congress chief whip in the lower house of parliament, as saying his party had decided to oppose the lowering of subsidies proposed last month in the 2000/01 (April-March) budget.

The Congress party on Saturday decided to launch a nationwide agitation against the cuts, the news agency reported.

Regional allies of the Bharatiya Janata Party-led coalition government have already opposed Finance Minister Yashwant Sinha's proposals to cut subsidies on foodgrains and fertilisers, saying these would hurt the poor.

Allies account for more than 100 seats in parliament in the 305-member ruling coalition.

Sinha increased urea prices by 15 percent besides hiking prices of foodgrains, saying that the rate at which food and fertiliser subsidies were growing was unsustainable and would push up the country's fiscal deficit.

India's fiscal deficit in 2000/01 is estimated at 5.1 percent of gross domestic product (GDP), compared to revised estimates of 5.6 percent of GDP in 1999/2000.

Sinha had estimated that his moves would lower the subsidy bill by 60 billion rupees (41.38 Billion) in 2000/01.-Reuters