Types of Subsidy and Their Effects

A subsidy is a financial benefit or support the government gives to institutions or individuals. It can be either a direct or indirect subsidy. Direct subsidy refers to the support given in the form of cash. The indirect subsidy, conversely, refers to the assistance offered through tax cuts or low-interest loans.

Subsidy Types and Effects

Food Subsidy

  • Objective: The primary goal of food subsidy is to provide essential food items to a significant portion of the population living below the poverty line in India. These subsidized food products are distributed through the Public Distribution System (PDS).
  • Effects: Food subsidies help ....
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