We have been taught by
capitalistic economic system that subsidy is bad for business and it is anti
growth. As followers of capitalistic economic system World Bank, IMF and all
economists related to the economist circle of Capitalism, agree on this. Ask
any noble laureate economist except deviated characters like Joseph Stieglitz
about this, they will tell you mostly about the demerits of subsidies. Of
course a person like Piketty has the guts to challenge this theorization of
anti subsidy ideas. Any one with fair knowledge of development economics agree
that the huge inequality prevailing across the globe is obnoxious. For saying
this, we do not need to quote Kaushik Basu, the Chief Economist of Wold Bank. The
requirements for different states vary from each other and cannot be
standardized. A big country like India with mention of socialism in its
preamble can try to follow path of American capitalism but may achieve limited
success. Further, the question comes on the huge subsidy provided by big
multinational corporations like Uber or multinational funded venture Ola. From
where does the money come? These are primarily the marketing expenses during
the break even period of the business.
Is it not subsidizing prices? Can we not consider this as dumping? The
only difference is; these subsidies are for capturing market and expansion of
business while state subsidies are for alleviating poverty and expansion of
purchasing power. The huge discount provided by brands like Pantaloons or Marks
and Spencer are sometimes due to distress selling. That is again bad for
companies business as well as wardrobe of customers. We end up buying something
which we never required. If minimalism is becoming trendy then the future of
these subsidized pricing, dumping or distress selling will also be under
threat. The future is unknown but for sure the world will come out as a better
living space for us under Trump, Modi or multilateral leadership of Ban Ki-Moon.
