SubsidyNomics

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SummaryTo get subsidies, we need the poor. If they did not exist, we would have to invent them

Nobel laureate Amartya Sen is so evocative when, confronted with the issue of cutting subsidies for the poor, he argues for cutting subsidies used by the rich first. The diesel subsidies used by those monstrous SUVs, the gargantuan electricity subsidies used to power the silent air-conditioners of the rich, the near-completely free water used for their manicured lawns; and we’re not even talking of kulaks who grab the fertiliser subsidies and whose water-guzzling crops have made life living hell for those who cannot afford to keep lowering the bore depth of their tubewells.

But there is one fatal flaw in the argument. There is no subsidy, just as there is no reservation, that is made in the name of the rich. They are all made in the name of the poor. The diesel subsidy is made in the name of the poor farmer and to keep transport—of food, for instance—cheap so the poor don’t suffer. Tens of thousands of crore rupees of kerosene subsidies are made so the poor can light tiny lamps to brighten their dismal lives a wee bit. Everyone knows the poor don’t get them, but any attempt to cut subsidies is defeated on grounds the poor will suffer. To paraphrase Voltaire: if the poor did not exist, we would have to invent them. Time to raise that poverty line, and dramatically. How else can we justify those higher subsidies?

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