Budget 2014: End subsidy mentality, says economist

(The Star) – This budget, the government is expected to announce the new amount that will be given out under the 1Malaysia People’s Aid (BR1M) scheme and Alliance Investment Bank Bhd chief economist Manokaran Mottain (pic) feels that such short-term solutions should be dispensed with.

“The government is already trying to get rid of the subsidy mentality but these types of hand-outs only reinforces the mentality,” he said, adding that the government’s intentions were good but the execution was not.

Manokaran suggested that a system similar to India’s rationing system be introduced, under which people who fall under the low-income category can buy basic items at a subsidised price.

“I’m not asking the government to go backwards but the concept can be modified to suit the local context. 

The government should also identify the target group and ensure that no one takes advantage of the scheme,” he said.

He added that although the money that is given out may boost consumption. there was no guarantee that it would be used wisely.

“Even if the government give the RM500, do you think the people are really going to keep it for their children’s education expenses etc? There are many other ways to help them instead,” he said.