Subsidy Defined & Re-Defined:
· MONEY paid, usually by GOVERNMENT, to keep PRICES below what they would be in a free market, or to keep alive businesses that would otherwise go bust, or to make activities happen that otherwise would not take place.
· Subsidies can be a form of PROTECTIONISM by making domestic goods and SERVICES artificially competitive against IMPORTS.
· By distorting markets, they can impose large economic costs.
While the above being the true definition of ‘Dry-Economics’, in the contexts of “Socio-Economics of a Welfare State”, its an Interventional Instrument of Government to enable those who cannot, otherwise, meet their ‘Basic-Needs’ – on account of Economic-Poverty.
As to the definition of ‘Basic-Needs’ there cannot be any differing opinions.
* Potable Water,
* Nutritious Food,
* Primary Health & Education,
* Equal Employment Opportunities, &
* Economic Security to the ‘Challenged, Old and Infirm.
Under no stretch of imagination, anyone, in his right sense can include the following to the above list:
Ø Expensive & highly Polluting Cars owned by individuals, families or organisations that are used for personal transportation;
Ø Diesel Power Generators used to protect the occupants from the discomfort on account of power cuts;
Ø Manufacturing, Service Providing or Infrastructure, for profit, using highly polluting fuels.
Hon. Prime Minister’s Speech of September 22, 2012
I) Case of Subsidized Diesel:
§ He has confessed that much of the (subsidised) diesel is used by big cars and SUVs “owned by the rich and by factories and businesses”, acceding to the last highlighted point of the above list;
§ Demonstrated ‘Zero’ inclination in plugging-up any of the above “Leakages”; and
§ Still resolved to extend a subsidy of as much as Rs. 17.50/- per liter on diesel – that can be used indiscriminately, by anyone for any purpose.
Who Deserves Subsidized Diesel?
* 3-Wheelers & 4-Wheelers which ply mini-mass Passenger & Cargo;
* Railways which undertake the mass-rapid transport of Passenger & Cargo;
* Road Transport Corporations which undertake the mass-rapid transport of Parcels & Passengers;
* Individual Farmers who need to irrigate their fields from ground-water;
* Farming Vehicles & other Equipments, if any, used for Agricultural Works & Public Works;
* Municipal or local community Water boards for running their stand-by diesel generating sets to pump potable water, during power-cuts;
* Hospitals, Old-Age Homes, Orphanages & Schools for running their stand-by diesel generating sets, during power-cuts; and
* Any other deserving entities, not listed above, for genuine purpose.
If Dr. MMS could show some resolve to plug the above leakages he could save at least Rs. 23,000/- Crores – on Diesel Subsidy alone.
II) Case of Subsidized LPG:
Dr. MMS declares, based on a study, that “almost half of our people, who need our (Govt.’s), actually use only 6 cylinders (a Year) or less.”
And only that approximately 50% of all the LPG Connection Holders, truly, deserve subsidized LPG and none else – in true spirit of a ‘Welfare-State’.
In our Homes we consume, steadily, 12 cylinders, a Year if not more, because we prepare three meals a Day, not to speak of preparation of Tea - Twice a Day as well as heating water for bathing purposes at least once a Day and sometimes more.
Based on the above and my own observation of the issue for the last few Decades, I confirm that the above statement-of-fact to be true as those, who struggle to meet their basic-needs are too busy chasing and working for their daily wage that they hardly cook twice a Day and also never use LPG for heating water for bathing purpose.
Granting him that the above to be true, he failed to give us any vision or plan to plug the leakage on account of as much as 57.50 Million Connection Holders.
By slashing-down subsidy to ‘Zero%’ on all undeserving LPG Connections, the Government would enable OMCs (Oil Manufacturing Companies) earn – after providing subsidized LPG to 50% of the above deserving lot @Rs. 450/- per cylinder (for 6 cylinders a Year) and by charging from the rest @Rs. 750/- per cylinder (for 12 cylinders a Year) – as much as Rs. 36,225/- Crores a Year on LPG Marketing alone!
This also means, GoI reducing its subsidy burden on LPG by Rs. 36,225/- a Year.
Let not Dr. Singh come to us cribbing about Current Fiscal Deficit threatening our National Economy and show the ‘Bhooth’ of failed Western Economies – most of which have lived-off, for too long, on borrowed credit and are now unwilling to make those essential sacrifices to return to realistic and sustainable economy.
Dr. M.M.S., The Sustainable solution is well within your hands to reduce all deficits and show economic progress based on the sound principles of Socio-Economics that encompass all sections of Society.