Economics of Subsidies

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.