The dictionary definition of the word " subsidy " is " a sum of money given to help keep the price of something low " which means that price is being artificially kept depressed. A few days back the price of diesel in India was increased by Rs 3/lit, kerosene by Rs 2/lit and cooking gas by Rs 50/cylinder. Diesel now sells at Rs 41 instead of Rs 37 before the price increase,much lower than petrol which sells at over Rs 65/lit. The increase has been limited to Rs 3 because the government reduced taxes on diesel. Customs or import duty of 5% on crude oil was abolished and the same duty on diesel and petrol was cut from 7.5% to 2.5%. Excise duty on diesel was cut from Rs 4.60/lit to Rs 2/lit. The government will incur a loss of Rs 230 billion due to the cut in excise duty and a loss of Rs 260 billion due to the cut in customs duty. Total loss of taxes will be Rs 490 billion. Experts think that the government will be unable to keep fiscal deficit at 4.6% as promised because of this loss of revenue. Oil company losses will come down from Rs 1.71 trillion to Rs 1.20 trillion that is Rs 511.40 billion. The government has been forcing oil companies to keep prices low even though it has been taking its cut in the form of taxes right at the beginning because it is the largest shareholder of the companies which are run by civil servants. Why it is counted as deficit if the tax revenue falls short but not if the public sector oil companies are losing trillions of rupees has never been explained by the experts. The minority shareholders are the main losers as they will not be receiving any dividends which is blatant cheating. Only a World Class Economist can pull off such magic.