There are no free lunches. We have to pay for what we consume. Subsidy is nothing but us paying the prices indirectly. Worst is that we pay for services and products that we do not consume. Worse even is that we pay for the inefficiencies and babudoom of the subsidy RAJ. Let the consumers pay the actual price of the product they consume.
Ironical as it may sound, poor people too pays for these subsidies, as dose the rich, indirectly but in HIGHER proportion than he would have paid, if bought the goods and services at free market. In effect, it’s not the rich cross subsidizing the poor but the other way round.
How many beggars have you seen owning a car? But each one of them is paying for the fuel consumed by a millionaire, every time the rich buys petrol. He pays because; the government has to pay for the subsidies from its revenue kitty and can not spend enough to make the beggar’s life better, by investing in social sector. Isn’t it logical that ones who can afford to buy a car should be made to pay the full market price for the fuel?
Deregulation is a good move. Every sector the government moved out and deregulated has flourished. The market will find its’ right price based on demand and supply. The government should only act as a watchdog. Inflation is the result of more demand than supply. The Government should move out of all sectors and market forces should be allowed to operate. It is 1000 times better to p
Re: Why do you want the poor to pay for the rich person's consum
by ratheesh raman on Jun 28, 2010 04:42 PM
subsidies look as if they are draining our resources, especially when one looks from the capitalistic view. But there is a futile cycle being run when you actually decontrol the fuel prices
when price of petrol increases, food price increase (so many consumer item also) because transport will become costly...employees will ask for more wage, DA to overcome the rise in living price. govt will give the much saved money it got from saving subsidy.
in this futile cycle, one should observe that the price rise will for sure affect the ones without jobs, and farmers, since they cannot get DA or increased salary, unless production increases. So your point that the rich pays what they consume actually got deflated here.
in capitalist countries (though the mighty US even give subsidies) the removal of subsidies is encouraged as it brings parity to the consumers and promote competition which is their basic principle
but in a country like ours where the system is neither socialist nor capitalist, it will burn our fingers, if we remove the essential subsidies.
we could have opted for alternates like surcharge on all private vehicles (as in your terms the 'richmans vehicles') at the time of registration/yearly and use the money to subsidise the fuel for commerce.this will discourage people from unnecessarily buying cars if they cannot afford it
Re: Re: Why do you want the poor to pay for the rich person's co
by Netra Maithun on Jun 28, 2010 05:39 PM
Dear Ratheesh Raman, Thank for your comments. I would like to argue against some of your points.
Neither Capitalist not communist system is ideal. Our founding father recognised this and opted for the middle road. In theory smart but in practice, half a century later we landed up with the worse of both the system. But, human (animal) nature is to be selfish. To do things for own good. The capitalist system thieve on the logic that when everyone works for their own good the society as a whole benefits. But such a system can deliver when there is rule of law. European countries specially the Scandinavian countries are good examples. China embraced this core logic of capitalism and since 80s, they have been growing at over 10%. Their per capita income (at PPP) is three times India. Vietnam also followed Chinese Model. We have (Defunct) PDS system in place for decades, which is the panacea of grass root corruptions. Your money and mine used to feed the poor is diverted to fill pockets of Babus and politician. Goods which should reach the poor are diverted to open market. Blue coloured kerosene diverted from PDS can be bought freely. Consumption creates prosperity. Curtailing consumption would equate to creating roadblocks for India's growth. Deregulating all sectors would usher in prosperity. Though not an example that fits, but we must recognise that deregulating telecom has enabled almost everyone to be connected, anywhere, anytime.
Re: Re: Re: Why do you want the poor to pay for the rich person'
by Netra Maithun on Jun 28, 2010 05:46 PM
Deregulation of civil aviation has enabled almost all middle class to fly, and save a day or two of travel time. When there are multiple player in the market, the consumers benefits. However, your concerns are justified. We hvae been cocooned by administered prices for petroleum products. Your concerns about high taxes too are justified. The government has used indirect taxes on fuel prices to milk everyone of us. Indirect Taxes must be rationalised and should mirror other goods and services. But, I would like to come back to my first point in my post. There are no free lunches. We pay either way for the actual prices of Fuel. I would rather like to know how much we pay and pay directly and not pay even a higher price in the guise of subsidy.
Re: Re: Re: Re: Why do you want the poor to pay for the rich pers
by ratheesh raman on Jun 28, 2010 06:05 PM
Yes mr. maithun, there are no free lunches. but the context is the one in question is it at a personal level or at the state level. if the country wants to have the poor people bettered and along side that develop the rich and urbane there can be no be no free lunch or free way. it has to absorb some shocks of subsidy.
deregulation in all other factors i can accept but the petroleum prices are the ones where the economy is pegged at. so you have to have your grip on it. telecom, airline, insurance no one has the snowball effect, but petrol has.
so to bring competitive prices in petroleum industry we have to first create a conducive atmosphere for competition. simply deregulating fuel prices will end up like the ambani's infamous sibling fight which tarnished our international image as an investor unfriendly nation. you cannot talk about tight grip of government in almost every thing where the government has a say and deregulate petrol where it is a tough task. Government is for good governance, not for clerical job of allocation of funds!
i am in support of competition but only a fair one.
Re: Why do you want the poor to pay for the rich person's consum
by Argumentative Indian on Jun 28, 2010 04:27 PM
What's the meaning of Naitra Maithun? Is this a transliteration of a Hindi Word?
Re: Re: Why do you want the poor to pay for the rich person's co
by Vinod Pandey on Jun 28, 2010 05:35 PM
Even seasoned writers use dirty pseudo names like NM.In some places people call it C-sqare. One C stands for Chakcu. For the other ask some Nothern Indian fellow.
Re: Why do you want the poor to pay for the rich person's consum
by Argumentative Indian on Jun 28, 2010 04:26 PM
Dear Sychophant a few questions for you:
1) What is the Indian Parasites', OOps, Governments, subsidy on fuel today? 2) What is its income from taxes on fuel? 3) How much money does it spend on social welfare, how much on salaries of goverment servants? 4) What is the Cost to the Country (CTC) of a cabinet minister? 5) What will be the loss to the country if some cabinet posts are abolished?
Now some other more complex questions, wonder if you would understand at all:
1) Do beggars eat food? - that's a rhetorical question. 2) Do the prices of fuel affect food prices? 3) When fuel prices go down, do food prices go down? So once fuel prices are either raised, or threatened to be raised and food prices rise, what would happen next?
Re: Re: Why do you want the poor to pay for the rich person's co
by Vinod Pandey on Jun 28, 2010 04:55 PM
And what about the ornamental posts like that of President and Governors. stables for old horese. And what is the need of Rajya Sabha? Crore of Rupee could be saved by abpolishing these useless Institutions.In case of emergency India could have National Governments both at center and in states.
Re: Re: Why do you want the poor to pay for the rich person's co
by Sandeep Rao on Jun 28, 2010 04:31 PM
some good questions.... what about the 100% tax on petrol that Govt. takes from public. I still don't understand this deregulation.... on one hand Govt. takes huge tax on fuel and on the other hand introduces subsidies.... both are equally bad.... removing just one is no good.........
Re: Re: Re: Why do you want the poor to pay for the rich person'
by ratheesh raman on Jun 28, 2010 04:45 PM
at the same time government wants to earn money through tax, and at the same time they blame subsidies for fiscal deficit
Re: Re: Re: Why do you want the poor to pay for the rich person'
by Vinod Pandey on Jun 28, 2010 04:52 PM
The simple fact is that apart from international pressure, blackmail by OPEC countries the Reliance Petroleum and other private oil companies were twisting the arms of the central Government as their pump stations were breft of customers. Like SEZ this action of the Govt. is to benifit the Ambanis and other private players.No doubt even BJP govt. would have done the same thing because they too are mortal political aprty. After all all parties need their money to fight elections and repayment is done lateron by fleecing the gullible common man. Why don't this honest PM aks swiss banks to return trillions of indian black money stacked by corrupt politicians and bureucrats ?
Re: Re: Why do you want the poor to pay for the rich person's co
by Netra Maithun on Jun 28, 2010 04:42 PM
Dear Argumentative Indian, I would reply to just two of your quiries. related to food.
Yes Beggars eat food. The farmers eat food. Most Indian farmers are poor. They sell their produce at very low price to middle man. A farmer's realization is one fifth of the retail price, that you and me pay for food. 25% of our produce is wasted due to poor handling. The government is the only self appoineted agent to handle buying storing and trading of food grains. People starve not because there is no food but because the Goverment and Babudoom deny our fellow citizen food.
Fuel prices affect food price. But not as significantly as it is perceived. Our agriculture is monsoon based except the Rich Punjab-Haryana_ western UP belt, which is disel / electrical water pump based. Transportation cost of food will increase. How much 10% to 20% ( In proportion of fuel price increase . This is much much lower that what can be achieved by deregulating handling of agricultural produce from Government Hands..... We can go on debating. But, in subsidy raj, the poor pays more than the rich. The Politicians and the Babus gains the most... Do you want the money that you earn with your hard work be wasted by a bunch of self serving politicians and Babus???
Re: Re: Re: Why do you want the poor to pay for the rich person'
by ratheesh raman on Jun 28, 2010 04:58 PM
that is not correct...the poor dont have purchasing power to buy food though the food is wasted stored in warehouses. no because of in efficiency of government in handling.
fuel prices affect food price both directly and indirectly...directly because of increase in transportation, indirectly because of the cumulative effect of other areas like real estate, power, living standards etc squeezing the farmer to increase output or increase the price.
Re: Re: Re: Why do you want the poor to pay for the rich person'
by Argumentative Indian on Jun 28, 2010 04:49 PM
NM, thanks for very decent replies to my rhetorical and perhaps, provocative questions, appreciate the maturity & sophistication.
I DO NOT want my hard earned money to be wasted by a bunch of self serving politicians and Babus, and am a great believer of de - regularization myself. My only grouse is that this government should firstly remove taxes on fuel and secondly stop its profligacy on its various ministries and departments, most of which are useless.
Re: Re: Re: Re: Why do you want the poor to pay for the rich pers
by Vinod Pandey on Jun 28, 2010 05:03 PM
After a long time some good arguments are coming up on this "tweeter". Otherwise most of the time some quite useless and dirty comments come up on rediff discussion Board. Keep it up dear AU andNM duo.
Re: Why do you want the poor to pay for the rich person's consum
by Netra Maithun on Jun 28, 2010 04:23 PM
. It is 1000 times better to pay cash to poor people and allow them to decide on what and how to spend than to device subsidies and con the poor.
Subsidies in effect in all sectors need to be removed.
Re: Re: @KOOL GUY....
by Argumentative Indian on Jun 28, 2010 04:35 PM
June 2003 Crude was around $ 30 per barrel.
Guys, we need to STOP using crude immediately. Remember the followers of the most peaceful one are rumored to be largely funded by the oil exporters. The latters' cost of drilling cannot increase at more than 2% per annum, the inflation in a developed country, so the increase in prices is actually just increase in profits for these most peaceful people's supporters!!!!!!!!!!!
Re: Re: Re: @KOOL GUY....
by Vinod Pandey on Jun 28, 2010 05:26 PM
In fact the Govt. has assumed the role of a cheater. Earlier only during Budget prices were declared and rest o the year they were the same. Now any timeprice of anything could be changed a the whims and fancies of the FM or his officials or at the behest of the Capitalists and industrialists. The drama of Annual Budget also need to be scrapped.
If you really want to deregulate petrol, start with lowering the tax. How can any one argue that public has to bear the cost for our inefficient Govt. 50% tax???? Well..... what can you expect from an left Govt. Let us also tax fresh air -> cannot afford to provided that for free.
Re: One of the most immature article
by Sandeep Rao on Jun 28, 2010 04:34 PM
Exactly.... petrol prices are double than what they should have been, just because of Govt. Tax. Why UPA Govt does not think about it and why rediff does not report it anywhere is beyond anybody's understanding.
If prices will not go how can soniya and rahul will enjoy congress raj half of delhi police and our hardearned money is spend on these two who are desh pe bhojh
Rediff, how much you have got paid for writing in Favor of Government. When BJP did this, every one was crying.... now no one... Congress is slow Poison...
Inflation means people having lot of money, central govt employees income raised 3 times within 2 years, bank also. Due to globalisation rich are becoming richer, middle class people are flocking in malls, multiplexes, five star hotels which was unaffoardable for them in previous years. So Govt want to control it, increase in fuel means increase in everything which will reduce your money in hand Thus inflation is controlled. Kerosene is used to mix in diesel everywhere, poor people who were using kerosene is now using gas only.
Re: INFLATION IS CONTROLLED WHEN UR POCKET IS EMPTY
by ratheesh raman on Jun 28, 2010 04:47 PM
inflation to some extend is good...but it should also be kept in control, so that the poor are not affected. sadly that doesnt happen in our country.
