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Indian Economy

STATE SUBSIDIES AND THE PLATONIC CONCEPTION OF LAW

The article is authored by Jatin Johns Paly, 4th Year student at National University of Advanced Legal Studies Kochi, Kerala.

Picture Credit: – financialexpress.com

INTRODUCTION

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 therein. One of the functions performed by the State nowadays is providing subsidised goods and services to the businesses[1], particularly to those who cannot afford such goods and services at their market price. These are provided to them at a lower rate. Valuation and pricing of the goods is borne by the State. However, state subsidies have often run into legal trouble with questions being raised over State’s intention to appease the impoverished class by providing them goods at a subsidised rate. Further, questions have been raised over its constitutionality as to whether it violates  Article 14 of the Constitution of India, and as to why non-beneficiaries should pay taxes for services they are not allowed to avail.

This research tries to answer such questions from Plato’s philosophical point of view regarding his conception of law. Although these questions and issues find their basis in legal interpretation, Plato’s philosophical conception of law does offer an insight into the answers of questions, which the courts too have emphasised while deciding legal issues. The said philosophy vis-à-vis the aforementioned issues have been dealt with in this research.

IS THE CONCEPT OF STATE SUBSIDY INCONSISTENT WITH ARTICLE 14 OF THE CONSTITUTION OF INDIA?

Article 14 of the Constitution of India, dealing with the right to equality is one of the fundamental features of the Constitution of India[2] and, invariably, forms part of the basic structure of the Constitution of India.[3] The Article reads:

“The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”.[4]

The cursory idea behind Article 14 of the Constitution of India 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.[5] 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 of the Constitution of India becomes even more necessary.[6]

The concept of State subsidies, however, seems to be at odd ends with the objective of Article 14 of the Constitution of India, whereby the State provides certain essential goods at subsidised rates to the people who cannot afford such goods at their market price. This concept has, over the years, been a subject of discussion among different schools of thought having their unique perspective about the concept. Some argue that the State should not indulge in granting subsidies to a class of people as it violates the principle of equality under Article 14 of the Constitution of India; while some defend the acts of the 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 for reducing existing inequalities 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 a jurisprudential point of view, 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 extensively dealt 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’[7] and ‘Laws’[8], Plato analyses what a State should to do in order to enforce the legally established laws even though there is a distinct difference in the ideas of both of these works.

Plato’s Views On Law

The answer to the question whether State subsidies are inconsistent with Article 14 of the Constitution of India, too lies in the works of Plato. He considered views of other people that law is of a divine origin and humans have to find a path to it[9] and that it is a product of impersonal social and natural forces.[10] Plato was of the opinion that all these views were partly correct, however, he regarded the concept of law in the nature of a compromise between the individuals and the conduct to the circumstances of the external world.

More specifically, Plato considered the concept of laws to be genetic and teleological in nature to achieve a particular desired end i.e., to correct the inequalities in the relationship between society and its environment.[11] The precise end of the law is to achieve group unity among the masses which cannot be obtained if minority groups are disregarded or by legislating for single classes. This view of Plato leads to the position that if the function of law as the interest of the entire community is observed faithfully, in the end it will yield an understanding of the ideal laws in the world of forms which may then be utilized as models.[12]

This Platonic conception of law for uplifting the minority groups and not disregarding them on the premise of strictly following the principle of equality has been recognised by the courts in several cases. It is now as established principle that ‘equals have to be treated equally and unequals ought not to be treated equally’; while Article 14 forbids class legislation, it does not forbid classification for the purposes of implementing the right of equality guaranteed by it.[13] Thus, Article 14 allows for reasonable classification of individuals and does not strictly follow that everyone must be treated equally.

Judicial Perspective

In context of the question of State subsidies, the Hon’ble Supreme Court too observed that Haj subsidies provided by the Central Government were not discriminatory and thus, constitutional in nature. The Court based its decision on the premise that India is a country with diverse population and if the country were to be kept united, there needs to be tolerance and mutual respect for all the communities and sects.[14]

The decision of the Hon’ble 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 impoverished classes who cannot afford to purchase goods or services at their market price 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.  

CAN NON-BENEFICIARIES BE COMPELLED TO PAY TAXES FOR STATE SUBSIDIES?

The concept of State subsidy is based on the fact that the Government shall provide goods at subsidised rates to the people. The State shall incur the cost of the subsidised goods and such cost is borne out of the Consolidated Fund of India. However, the funds in the Consolidated Fund of India are given by the people to the Government in the form of taxes.[15] Thus, every cost of State action incurred is actually the money of the people of India in the form of taxes paid by them.

With respect to State subsidies, the beneficiaries of such subsidies are only a few, however, the taxes have to be paid by all the people. In such a scenario, non-beneficiaries of the State subsidies often argue as to why they should pay taxes for the services they are not availing or are not allowed to avail. This is countered by the argument that the State does not ask for taxes for subsidies separately, instead, taxes are general in nature. Further, another argument is that laws have to be followed by everyone and one cannot choose to disobey a particular law if the same is not lucrative to that individual.[16]

The basis of the arguments by non-beneficiaries stems from the principles enshrined in Articles 14 and 19 of the Constitution of India[17] alleging that State subsidies are discriminatory and arbitrary. This debate is from the legal perspective. On the jurisprudential basis, Plato opined as to whether people can choose to disobey a particular law if the same goes against the individual.[18] He offers a provocative analysis as to why people should obey a law even if it goes against the interests of a particular individual in a certain case.

Plato’s Conception On Moral Liability

Plato emphasised the idea of good faith and, to some extent, the notion of honour vis-à-vis the duty to abide by the law. According to him, the duty to abide by a law depends on the moral worth a man possesses in his own eyes and in the opinion of society. He valued obedience to legislation highly for he held that the man whose victory over his fellow citizens took that form had the best claim to rule.[19] He explained his opinion by taking an analogy of the relationship of a father and son. He said if a son is punished by his father for a wrong, the child, in turn, does not hit back at the father in return. Similarly, a good citizen does not undertake to destroy the laws of the country if his country decides or undertakes to destroy him.

In his work, he further mentions about the trial of Socrates and choices he made vis-à-vis the obedience of laws before his execution. Crito suggests to his friend, Socrates, who is in prison awaiting execution, that his escape can be arranged. Socrates refuses to disobey the law and thus, wrong his country, even though the law has wronged him. Socrates simply states that a man ought to do what he has agreed to do, provided it is right; he ought to not violate his agreements. He adds that the State cannot exist if its laws are flouted and the decision of its courts made invalid and annulled by private persons.[20]

He further adds that once the society collectively follows the established laws, it would lead to an increase in the unity among the members of the society. That unity implies that the majority realize that it is in their own interest to obey the laws. Society does not act against its own will when it obeys its laws; when it does obey unwillingly, they will be soon abolished.[21] Plato believed that once general respect was secured for a particular law, it would be implicitly obeyed.

The same methodology is applicable to the modern world as well. The laws are made by the State for the interest of the society. If the members of the society were to disobey them it would create chaos in the society leading to increased uncertainty and insecurity in the society.

In light of the State subsidies, even though not all people are the beneficiaries of such schemes, for the overall betterment and progression of the society, it is essential that contribution to the funds is made by every member and not just by the beneficiaries of the subsidies. Plato has often emphasised on the ideal duty of the society to collectively help in its development by abiding by the laws. He mentions that law is not concerned with the special happiness of any class, but with the happiness of the whole society.[22] 

Judicial View  

The same view was adopted by the Hon’ble Supreme Court in the Haj subsidy case[23] wherein it dismissed the petition challenging the Haj subsidy. The Court observed that the laws are general in nature and have to be followed by every member of the society. Thus, the contention of the plaintiff that the non-beneficiaries should not be compelled to pay taxes was rejected.

Further, the Court added that the amounts used for subsidies by the State are generally a small portion of the taxes collected by them. Thus, a small portion of the same for the general interest of the society do not cause discrimination to the non-beneficiaries of the scheme.[24] Thus, Plato’s views about obedience of the law well established by the State is well reflected in the judgement of the court. The person, accordingly, cannot escape the liability of not paying the taxes or abiding by any law even if the same causes any prejudice to the interests of the individual concerned. Invariably, if the person chooses not to obey the same, penal consequences would be attracted which could cause great loss to the person concerned.

CONCLUSION

Plato’s conception of law helps us understand that the concept of State subsidies is not inconsistent with the idea of Article 14 of the Constitution of India because the basic purpose of the law is to reduce the inequalities in the society and if such objective can be achieved through such subsidies, then the same shall be considered as reasonable classification under the constitutional provision. 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. 

Thus, Plato’s principles are relevant even today and have been emphasised by the courts in several cases as well. His contribution to the field of philosophy cannot be undermined as the same has played an instrumental role in shaping the purpose of law and the role of the State in enforcement of the laws.


[1] Schemes for MSMEs in India, INVEST INDIA, available at < https://www.investindia.gov.in/schemes-msmes-india > (last visited on 26 October 2020).

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

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

[4] The Constitution of India 1950, Art. 14.

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

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

[7] Plato and Allan Bloom, Republic (Basic Books 1968).

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

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

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

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

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

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

[14] Prafull Goradia v. Union of India (2011) 2 SCC 568.

[15] “What is Subsidy?” Financial Express, 26 October 2020, available at <https://www.financialexpress.com/what-is/subsidy-meaning/1623426/> (last visited on 26 October 2020).

[16] Hill & Roscoe E. “Legal Validity and Legal Obligation.” 80(1) The Yale Law Journal, 47–75 (1970).

[17] The Constitution of India 1950, art. 19.

[18] Internet Encyclopedia of Philosophy, ‘Plato: The Laws’, available at <https://iep.utm.edu/pla-laws/#:~:text=Yet%2C%20Plato%20took%20his%20most,in%20one’s%20interest%20to%20obey.> (last visited on 25 October 2020).

[19] Plato and Thomas L. Pangle, The Laws of Plato 715C, 762E (Basic Books 1980).

[20] Internet Encyclopedia of Philosophy, ‘Plato: The Laws’, available at <https://iep.utm.edu/pla-laws/#:~:text=Yet%2C%20Plato%20took%20his%20most,in%20one’s%20interest%20to%20obey.> (last visited on 25 October 2020).

[21] Plato and Allan Bloom, Republic 359 (Basic Books 1968).

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

[23] Prafull Goradia v. Union of India (2011) 2 SCC 568.

[24] J. Venkatesan, “Supreme Court: Haj subsidy not discriminatory” The Hindu, 22 October 2016, available at <https://www.thehindu.com/news/national/Supreme-Court-Haj-subsidy-not-discriminatory/article15538241.ece>  (last visited on 25 October 2020).

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