Chandigarh, Feb. 25 -- Days before the Bhagwant Mann-led Aam Aadmi Party (AAP) government announced free food kits for 40 lakh families registered under the National Food Security Act (NFSA), a study evaluating the state's finances recommended rationalising subsidies through direct benefit transfers, low-cost borrowing, and strategic debt restructuring to ease fiscal pressure.

According to the evaluation conducted by the Mohali-based Indian School of Business (ISB), an excessive focus on subsidies and recurrent expenditures has caused the state to lag in capital-intensive sectors like industrial infrastructure, logistics, and digital transformation, thereby impacting long-term economic growth. The study notes that a substantial portion o...