Subsidy! A debatable subject

Petroleum subsidy got my attention today. Let me see both the sides.
Subsidy is good!

It gives people petroleum at cheaper rate so that they can run their cars, scooters, motorcycles etc. These people form roughly 30% of the population. These are the people who contribute maximum to the taxes. So these people deserve oil subsidy.

It keeps the transportation cost low. That keeps the commodity prices low (They are already high that’s another thing)


Subsidy is bad!

Direct consequence: Its bad in a way, the government spend crores on people who are already rich. The same amount of money (oil subsidy) can provide electricity, roads, water and food.

Indirect consequences: The low petrol prices will give rise to people buying more vehicles, more will be the congestion on road, more will be the pollution, more will be the consumption of oil, more oil will be required and consequently more will be the burden on the exchequer (oil subsidy). So if we think on the lines of society and environment, subsidy should not be provided and let the oil prices soar.

To conclude, the subsidy is bad for poor