I was watching the programme of Vijay TV,Neeya ,Naana’ Talk Show on 15 July 2012.
The topic was Price rise.
It brought out the apathetic conditions of the Middle and lower-income groups in India.
The topic touched on corporate subsidies.
The Economists quote growth rate of the Industry and the saving of Foreign Exchange.
Even if we agree to this, has it reduced the burden of the individuals?
Simple logic says that no one would declare Dividend from a losing Company.
How is it that IOC is declaring profits and at the same time crying foul that it would be hurt badly if the Oil Prics are not increased?
As a major Share holder the Government is earning the profit out of IOC.
How can we say Oil Companies/Government is incurring loss on account of Oil Subsidy granted and to recoup it the Government is increasing th Oil Price?
Notwithstanding the mumbo-jumbo of Economics, the fact remains people suffer.
On the other hand a group is emerging,especially IT which fuels inflation.
This trend is not good for the Society.
The word ‘subsidy’ gets the hackles of free market economists up. The government’s economic managers and advisors have consistently been in favour of eliminating – or at least reducing — subsidies.
The present environment supports their argument. The economic slowdown has meant slower revenue growth and a larger than expected ‘fiscal deficit’ – the gap between the government’s income and expenditure – with pressure mounting to reign in the deficit. Numerous voices – from corporate chambers, financial media personalities, and even fund managers – have been calling on the government to reduce deficit by cutting down subsidies. With food inflation abating, the government strategy appears to be to utilise the period until March to build public acceptance of the elimination of subsidies and then make its moves after the state elections are out of the way.
The subsidies that the government wishes to cut or eliminate fund diverse programmes, with the common theme being that they make available some item of mass consumption – foodgrains, fuel or fertilisers – at prices controlled by the government rather than left to market forces.
The most elaborate subsidy is the food security programme with a Public Distribution System (PDS) that procures grain from farmers, maintains a buffer stock in storage, and makes the grain available around the year to 65 million households across the country through nearly half-a-million retail outlets. The oil programme has several components — providing kerosene (used mainly for lighting by poor families) through PDS outlets; distributing Liquefied Petroleum Gas (LPG) for cooking to 115 million customers; and finally making diesel – 75% of which is used for mass transport, both rail and road, for agricultural machinery and for emergency power generation – available at government set prices. The last programme pays fertiliser manufacturers and importers to sell fertilisers to farmers at government set prices.
Government support for these programmes has the effect of lowering the expenditure of poor households. This assumes importance in the absence of a state-supported guarantee of minimum income levels. Social security – a fallback in case of unemployment, old age and incapacitation or illness – is non-existent for most Indians. A recent report (Divided We Stand: Why Inequality Keeps Rising) from the Organisation of Economic Co-operation and Development (OECD) finds India’s public social spending measured as a fraction of its GDP not only far lower than the developed countries, but also lower than China, Russia, Brazil, and South Africa, the ‘emerging economies’ with which it is often compared.
Yet the government’s economic advisors choose to question the provision of subsidies.
|Announcement Date||Effective Date||Dividend Type||Dividend (%)||Remarks|
|05/08/2000||Final||N.A.%||Nil Final Dividend|
|15/05/2000||Interim||40%||2nd Interim Dividend|
- Diesel subsidy is way too high in India (panchabuta.com)