After a long speech in which Chief Minister Y S Rajasekhara Reddy highlighted the states fiscal achievements and records,the 13th Finance Commission gently reminded him that subsidies provided by his government for over a dozen schemes are a cause for concern as they are worsening the states fiscal situation.

Commission Chairman Vijay Kelkar told the CM and his Cabinet colleagues that subsidies use up scare resources and proper management was necessary. The state government subsidises the consumer price of rice,the fiscal burden of which is projected to be Rs 1,900 crore in 2008-09 budget estimates. The state is also planning to subsidise power for agriculture a burden of Rs 2,385 crore, Kelkar said. Kelkar pointed out that the fiscal projects presented by the state for the period 2010-15 prima facie indicate a worsening in the states fiscal health.