State Subsidies And The Conception Of Law

The role of the State in administering governance has always been a subject of debate particularly regarding the extent of control over the affairs of the State and the responsibilities of such State. One of the functions performed by the State nowadays is providing subsidies to goods and services to the businesses, particularly to those who cannot afford such goods and services at their market price.

These are provided to them at a lower rate and loss on the goods borne by the State. However, state subsidies have often run into legal trouble with questions being raised over State’s malafide intention to appease the impoverished class by providing them with goods at a subsidised rate. Further, questions have been raised over its constitutionality as it allegedly violates Article 14 of the Indian Constitution, and as to why non-beneficiaries should pay taxes for services they are not allowed to avail.

Is The Concept Of State Subsidy Inconsistent With Article 14?

Article 14 dealing with the right to equality is one of the fundamental features of the Indian Constitution[1] and, invariably, forms part of the basic structure of the Indian Constitution.[2] The Article reads as:

“The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”.[3]

The cursory idea of Article 14 is that the State shall treat each person equally before the law, the essential purpose being to combat arbitrariness of State action because an action that is arbitrary, must necessarily involve negation of equality.[4] Further, the concept of rule of law rests on the premise of treating individuals equally, thus, the obligation on the part of the State to implement Article 14 becomes even more necessary.[5]

The concept of State subsidies, however, seems to be at odd ends with the objective of Article 14, whereby the State provides certain essential goods at subsidized rates to the people who cannot afford such goods at their market price. This concept has, over the years, been a subject of discussion with different schools of thought having their own perspective about the concept. Some argue that the State should indulge itself to grant subsidies to a class of people as it violates the principle of equality under Article 14 of the Constitution; while some defend the acts of State on the basis that in a country like India where a major chunk of its population is below the poverty line, it is the State’s responsibility to look after its citizens and devise ways to reducing inequalities existing in the society.

While this debate is the topic of discussion in the legal parlance and is for the Judiciary to decide, the same issue when looked at from the jurisprudential basis offers a deeper insight into the purpose of the law and the obligation of the State enforcing such law. One of the jurists who has dealt extensively with the aforementioned issues is Plato, who is known for his works relating to the purpose of legislation and the responsibilities on the part of the State. In his works ‘Republic’ and ‘Laws’, Plato analyses what a State ought to do in enforcing the legally established laws even though there is a stark difference in the ideas of both of these works.

Plato’s Views on Law

There is hardly any problem of legal philosophy not touched upon by Plato. He wrote during the decline of the Greek polis, when law and morality could appear as mere conventions imposed by shifting majorities in their own interest and the harmony between the legal order and the order of the universe could not easily be maintained[6]. Plato sought to restore, as far as possible, the traditional analogy between justice and the ordered cosmos. Justice, or right action, cannot be identified with mere obedience to laws, nor can a truly moral life be reduced to conformity with a conventional catalog of duties. Duties involve a knowledge of what is good for man, and this bears an intimate relation to human nature.[7] The question “What is justice?” dominates Plato’s Republic. Plato conceived of justice as that trait of human character which coordinates and limits to their proper spheres the various elements of the human psyche, in order to permit the whole man to function well. In order to understand the operation of justice in the human soul, Plato examined human nature writ large, the city-state.[8] The state functions well when it is governed by those who know the art of government, and the practice of this art requires a positive insight into the Good.[9] In a just society every citizen performs the role of which he is best capable for the good of the whole. Similarly, in the moral economy of the individual’s life, justice prevails when reason rules and the appetites and lower passions are relegated to their proper spheres. A just social order is achieved to the extent to which reason and rational principles govern the lives of its members.[10]

Judicial Perspective

The decision of the Supreme Court lies on the same lines of the Platonic conception of law and can be regarded as an extension of the same, whereby the State needs to focus on the development of the entire community, and if for that purpose certain special measures are required, then the State adopts the same. This would ensure that the minority classes who cannot afford to purchase goods or services at their market would still be able to purchase them, thereby reducing class inequalities and maintaining balance in the society. It would also ensure that the nation remains united and tolerant towards each other where the rich, having access to the resources, would not be able to exploit the poor for their personal gains. Thus, the role of the State in providing subsidies is really important and cannot be done away with as long as the class inequalities in the society subsist. Also, the views and thinking of Plato in this regard cannot be undermined as the same laid the foundation of the now generally accepted and established principle of increased State responsibility.  


Plato’s conception of law helps us understand that the concept of state subsidies in not inconsistent with the idea of Article 14 of the Indian Constitution because the basic purpose of the law is to reduce the inequalities in the society and if such objective can be achieved through state subsidies then the same shall be considered as reasonable classification under the Article. Further, the non-beneficiaries of subsidies cannot put forward the argument that since they are not availing the subsidies, they should not be taxed for the same purpose. This is so because Plato opined that if everyone were to disobey laws prejudiced to them, it would create chaos in the society. 


[1] Indra Sawhney v Union of India (2000) 1 SCC 168.

[2] Kesavananda Bharti v State of Kerala (1973) 4 SCC 225.

[3] The Constitution of India 1950, art. 14.

[4] Ajay Hasia v Khalid Mujib Sehravardi (1981) 1 SCC 722.

[5] Hari Ram v State of Haryana (2010) 3 SCC 621.

[6] Plato and Thomas L. Pangle, The Laws of Plato 624A, 835C (Basic Books 1980).

[7] Plato and Thomas L. Pangle, The Laws of Plato 709A (Basic Books 1980); Plato and Allan Bloom, Republic 47I (Basic Books 1968).

[8] Plato and Thomas L. Pangle, The Laws of Plato 709 (Basic Books 1980).

[9] Huntington Cairns, “Plato’s Theory of Law” 56 HLR 359 (1942).

[10] Motor General Traders v State of Andhra Pradesh (1984) 1 SCC 222.


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