Subsidizing the petro products means the state owned oil companies import them at high costs and providing them at lower price to the people.  Consequently these oil companies put to heavy losses. 

In order to neutralize these heavy losses, Govt. issues oil bonds. Public sector banks, LIC and other state owned financial institutions subscribe to these bonds.  Banks/financial institutions have to suffer losses, if the yields on these bonds go down. In the event of losses, Banks have to increase their interest rates and service charges as well to ease out their losses.  The sufferer is ultimately the common folk. The common folk can not understand the cyclic effect of these subsidies and becoming pray to the gimmicks of the political parties and their leaders.

These cheap populist measures will burden the Govt.’s exchequer and the economy as a whole and due to which, the country is not able to focus on important areas. The country’s spending rate is relatively low on education, health, and infrastructure. According to the UNESCO, India has the lowest public expenditure on higher education per student in the world itself.

No Govt. is dare enough to lift these subsidies though the Govt. pretty well know that the subsidies are not reaching the people they are aimed at, instead they are benefiting affluent due to distortions in the distributing system. In fact, there is no place for controls in any form, in the liberalized economy. 

There is no market monitoring agency/system in India to track the production and consumption patterns, though it is the fifth highest oil consumer in the world. 

Country’s consumption rate of petro products is increasing day by day. If this rate of consumption continues to grow, our dependence on oil imports will naturally increase, since we don’t have the required resources.  According to the figures available, the country spent nearly Rs. 149.5 billions ($3.35 billion) as against the initial estimation of about 31.1 billion rupees on oil subsidies alone, which is 1.5 percent of all government expenditures.  

I consider this price hike as partial stabilising of oil prices to that of market price. I am of the opinion that no subsidies shall continue.  Govt. has to take steps for  Laisez Fair market conditions to prevail in the country. Govt. should confine its role to that of facilitator. Instead of controling prices, the Govt. should control the market.  If all kinds of subsidies are lifted, the prices of the commodities may go up in the shortrun, but in the long run it would be beneficial for the country's economy and the people at large. 

Subsidies in any form would derail the planned efforts (if any) and lead to distortions in relative prices and problems in resource allocations. People should understand this and the cyclic effects of the subsidies and reject those leaders offering subsidies/services for free, since nothing comes for free.  Ultimately, the common man himself has to bear this burden in some way or other.