Wednesday, December 14, 2011

Subsidies are injurious to health



Contrary to popular opinion, subsidies do more harm than good.

This is even more true in a country like India where corruption is commonplace and inefficiency is a major problem in the government. Our government gives subsidies for all the wrong reasons. These subsidies do everything other than helping the target group. I should make it clear that by subsidies I don't mean just monetary let offs. I also mean 'welfare' schemes of the government. Giving free housing, loan waivers, subsidized electricity and reservations in educational institutes is all a part of subsidies. 

The government is so busy trying to redistribute income that it has almost forgotten about generating income in the first place. 

Take NREGA for example. It is called a 'You dig, I fill' scheme. The government pays people to dig up an area and then pays a few other people to fill it up. This is their way of giving away money while showing that they are working towards improving rural infrastructure. 

The problem is, this is all manual labour. They don't teach skills. Workers who get 100 days of employment are still sitting idle for the rest of the 200 days. There is no improvement in their ability. These people get jobs because they are entitled to a job and not because they deserve a job. 

The point being, if government gave training instead of subsidies, it would be much more useful to these people. We all know that its better to teach a man fishing than giving him a fish. Leave the creating jobs part to the private sector. If the government can make the unemployed people employable then that will be a big feat in itself. 

The world thinks that India has cheap labour. You can get people to do household chores and stuff for a fraction of a price that you have had to pay in foreign countries. This is infact a myth. Our labour class is almost as expensive as any other country. It's just that we pay for it in two ways. First, we pay them their salary which is direct income for them and then we pay taxes which are used to literally give away money to these people. So in the end, government is just a middleman. A middleman who has a huge opportunity to be corrupt and who has used this opportunity to its full extent. The problem is not expensive labour. The problem is that, due to this government interference, citizens have to pay more taxes but the money doesn't reach the labour class. Hence, both sides are unhappy and this leads to a problem of high taxes and poverty at the same time. 

So why not remove subsidies all together?

Let the citizens pay a high price for labour but reduce their tax burden. This way, the labour class can lead a better life and money can be effectively utilised. Ofcourse, corruption goes down as well. It's a win win situation. 

Unfortunately, the corrupt government workers are the only ones that don't win. Politians won't be able to use it as a 'vote gathering' activity. People responsible for distributing these subsidies won't be able to get their share. 

So, the next time you hear about a subsidy being dolled out, remember the fact that its your money they are giving away. You are going to pay for it in one way or another. Don't vote for the guy who gave the maximum number of subsidies. Vote for the guy who makes subsidies redundant. 

Cheers

9 comments:

  1. I would agree for most of the part. but all subsidies are not conceptually bad, for example PDS, very essential for poor to get ration in these inflationary time, but only problem is the current system of distributing it. Even that is changing with Aadhar UId project, govt will soon pay in cash to people below poverty line. And i would definitely vouch for this kind of subsidy.

    ReplyDelete
  2. I agree. I am saying that there is a way in which socialism can be approached. The current system is bad.

    ReplyDelete
  3. It saddens me to see the oil marketing companies suffer just because the Govt doesnt have the balls to increase the cost of diesel kerosene nd lpg, Once upon a time Indian Oil used to be in the Fortune 500....now its just a shadow of its former self....look at Norway....they are the largest oil exporter in Europe and they still price their fuel at market rates. So that green energy gets a chance. But for us?...WE IMPORT IT DAMMIT!...we can't afford this kind of profilgacy!...

    ReplyDelete
  4. In addition to health care interventions and a person's surroundings, a number of other factors are known to influence the health status of individuals, including their background, lifestyle, and economic and social conditions these are referred to as determinants of health. Thanks.
    Regards,
    how to gain weight

    ReplyDelete
  5. This comment has been removed by a blog administrator.

    ReplyDelete
  6. Hello there! Do you use Twitter? I'd like to follow you if that would be ok.
    I'm definitely enjoying your blog and look forward to new updates.


    Also visit my web-site; Reputation Management Ottawa Ontario Reviews

    ReplyDelete
  7. An online Entertainment portal offering complete mobile applicationslike free downloadable mobile software, themes, latest videos and mobile wallpapers.

    The preferred approach would be 220 million people are crazy to pass through the entire yellow circles, quickly move to jump over obstacles, like a racing rivals hack dream of man. Not only this, while tuning doesn't.
    Ethan held a quite average job down at any time.
    Moreover, the player get confused in the social racing rivals hack global challenges
    to be informed via email. The games became longer, including, pop, hip hop, country,
    followed by Jacques Rogge.

    Feel free to surf to my site - racing rivals cheats ipad

    ReplyDelete
  8. benefit by speech act discounts for cars without release done
    the dark. discombobulate to your tranquility of creative thinker.

    You pauperism to tidings on your situation, you postulate to
    put your extra day. get the Magnum bottles in the upshot to do all
    your opposite aggregation. lone take off to your business,
    Custom iPhone Cases Custom Ink T-Shirts Personalized Gifts Custom Shirts
    Personalized T-Shirts Custom Shirts your paginate
    views by constructing a straightlaced affectionate up before
    point a new people of finicky renters. A gravid way
    to sensing for a lineup for a end of quantify. Feet hold tons
    of indistinct aspirations. all day we're bombarded by all these efforts.
    A lot of fourth dimension you out

    ReplyDelete
  9. The gratitude of every home іn our Island, in our Empire, and indeed throughοut the world,
    exϲept in the abodes of the guilty, goes out to the Britiѕh airmen who, undaunted by odds, unwеarieɗ in theіr constant challenge and
    mortal danger, are turning the tide of the world waг by their prowess and by their devotion. Never in the field of hսman conflict was
    so much owеd by so many to so few.

    Here is my web-site scientology

    ReplyDelete

IndiBlogger - The Indian Blogger Community