ExpertDabbler

The left parties want petrol hike to be reversed. Assume the government accedes to the demand. The government has to increase the subsidy on petrol. Who funds the subsidy? Taxes of course. Most of the tax revenue come from indirect taxes – central excise, customs and sales tax. Indirect taxes are by nature regressive – for a beedi bought, I pay the same tax as a guy who does not even work.

That is, when Bobben Kunjokka, a left party worker smokes Malabar beedi, he contributes the same extent to the subsidy to as any rich guy who smokes Malabar Beedi. And the beneficiary can be even a guy who fills gas for his Merc.

Okay, assume the government decides to print notes to make up for the deficit. This will again push up inflation which in turn will hurt the poor more than the rich.

So long as indirect taxes far exceeds direct taxes, so long as subsidy is given blindly for all, subsidy is a mosadi on the poor. There is no better way to keep richer and the poor poorer. And this is precisely what the left wants. Conversely, the left should be the only group in the history of mankind capable of protesting against what in effect are, their own philosophies.

* - this is based on my own understanding of economics.