Okay Used it for one full day to see if it works fine.
Here is the process I followed to connect to a proxy enabled wifi.
1. Delete the wifi profile which needs proxy (Only if you have saved it).
2. Now when you select the wifi which needs proxy you will have to configure your wifi. at the bottom of the list you will find an option called "advanced options".
3. Now you will see the proxy settings where in you can enter the proxy server ip address and port number. Enter the details and now save it.
4. Check that the mobile is connected to the wifi network.
5. If it is authenticated proxy then open up the default android browser. It will prompt for a username and password.
6. Now you can browser internet.
One bug I encountered is that sometimes I loose internet access to the apps suddenly even thought I have full wifi signal. I just had to open up my browser and just refreshed one page and then all worked fine again.
PS. Note for authenticated proxy you will have to keep the browser running in the background so that other apps will also have access to internet. If you close the broswer all the remaining apps will not have internet access anymore.
