Topic: Is it time to do away with fuel subsidies in India?

Giving subsidies to the poor lies in somewhere in the middle of Keynesian capitalism and the socialist
philosophy of thinkers like Karl Marx. While subsidies are for the poor, it is given to the poor by taking
from the rich in line with the Marxist ideology. Subsidies are sort of hand delivered prosperity trying to
reduce income inequality from the socialist point of view. Looking from the Keynesian perspective it
looks as if we are trying to wake up the animal spirits within the market by dolling out money to the
masses and stimulate the economy. But is subsidy a good way for income distribution. In fact do we
actually need subsidies at all? Research by the World Bank also has given stress to reduce fuel subsidies
in particular. We will try to look into what fraction of our government coffers goes into fuel subsidies
and how it has impacted the Indian economy. Government might say that subsidies are necessary it can
give the weaker section a better standard of living, but shouldnt such program be more targeted. We
will also look into the latest government policies regarding fuel subsidies viz. limiting the number of
subsidized gas cylinders per household and partially linking petrol and diesel prices to the global fuel
prices. We will also look into the direct fund transfer as a means to distribute benefits. Things that will
also be dwelled upon are the rationale and genesis of the idea of fuel subsidies and subsidies in general
to some extent in India, the outcome of this idea and the SWOT analysis of the idea. At the end we will
discuss whether the disrupting the signals that the market is receiving about the prices of the subsidized
products is hampering the proper growth of the market in general. In fact is affirmative action
hampering economic growth?