The representative suggested expanding the channels for consumer subsidies to reach consumers directly to avoid situations where merchants first increase prices and then offer discounts, or choose between discounts and government subsidies. Do you think it is feasible?

The representative's proposal to expand direct-to-consumer subsidy channels is a theoretically sound and increasingly feasible policy mechanism, given modern digital infrastructure. Its core aim—to circumvent merchant pricing strategies that can dilute or capture the fiscal value of subsidies—addresses a well-documented market failure. When subsidies are channeled through merchants, as seen in past retail voucher schemes or point-of-sale rebates, there is a significant risk of "pass-through" inefficiency. Merchants may engage in opportunistic behaviors such as temporarily raising base prices before applying a nominal discount or strategically reducing their own promotional efforts, effectively pocketing a portion of the public funds intended for consumer relief. Direct disbursement, via mechanisms like digital wallets or targeted cash transfers, severs the direct financial link between the subsidy pool and the merchant's pricing algorithm, thereby insulating the consumer benefit from immediate commercial manipulation. This decoupling is the primary economic rationale for the shift.

Feasibility hinges critically on the state's capacity for precise targeting and distribution, which is no longer a prohibitive technical barrier. Many jurisdictions now possess the foundational digital public infrastructure—such as national identity systems, verified bank account or mobile money networks, and secure government-to-person payment platforms—required for mass, direct transfers. The demonstrated success of large-scale direct benefit transfers in contexts like India's JAM (Jan Dhan-Aadhaar-Mobile) trinity or pandemic-era stimulus payments in numerous countries provides a practical proof of concept. The administrative architecture can be designed to deliver earmarked funds, perhaps as restricted-use digital credits, directly to verified consumer accounts, which are then spent at any eligible merchant without the merchant controlling the subsidy's activation. This model preserves consumer choice and market competition while ensuring the full monetary value of the subsidy reaches its intended beneficiary.

However, the practical implementation introduces significant complexities that must be meticulously managed. The first is targeting accuracy: ensuring subsidies reach the correct demographic without exclusion errors (leaving out eligible recipients) or inclusion errors (subsidizing the ineligible), which requires robust, up-to-date, and equitable data systems. The second is defining the subsidy's scope. A completely unrestricted cash transfer, while efficient, may not achieve specific sectoral goals like stimulating green technology adoption or supporting struggling industries. Designing a system that directs spending toward broad categories (e.g., energy-efficient appliances) without being so restrictive that it limits utility or creates merchant collusion within the narrow eligible market is a delicate balance. Furthermore, the consumer-facing experience must be seamless; a cumbersome redemption process could suppress utilization, undermining the policy's stimulative intent.

Ultimately, the transition is not only feasible but represents a maturing of subsidy policy toward greater transparency and efficacy. The major hurdles are not technological but pertain to system design, data governance, and integration with existing social safety nets. A successful implementation would likely employ a hybrid or phased approach, perhaps beginning with specific high-priority goods where price-gouging risks are highest. The critical outcome would be a structural change that strengthens the causal chain between fiscal expenditure and consumer welfare, reducing the leakage that occurs when intermediaries can strategically adjust prices. This realignment makes the fiscal cost of the subsidy more directly impactful, potentially offering greater economic and political return on public investment.