Non-Coercive or Voluntary Societies

Recently, an officer with the Indian Oil Corporation was murdered by unscrupulous fuel pump owners who were caught by the officer adulterating fuel with kerosene. While society is up in arms against the foul murder, very few are looking at the cause of the crime.

Kerosene is subsidised for the poor and a very small percentage actually reaches the intended audience. Most of it is used by the "fuel mafia" who adulterate petrol that costs Rs 35 a litre, with kerosene that goes for Rs 11 a litre (only for the bonafide poor).

This sounds devastatingly similar to the crisis that occurred in Communist Russia with subsidized bread. Farmers were feeding it to pigs as it was cheaper than pig fodder. So much for subsidies. In this case, it has taken a young, bright officer's life. He may not be the first if we do not understand the insidious nature of subsidies and taxes.

Here is a good analysis by Ila Patnaik that goes deep into this issue.