General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.56)


Subsidies mean

[A]. payment by government for purchase of goods and services
[B]. payment made by business enterprises to factors of production
[C]. payment made by companies to shareholders
[D]. payment made by the government to business enterprises, without buying any goods and services

Answer: Option D


No answer description available for this question.

Snigdha Mukherjee said: (May 12, 2011)  
Subsidies basically are referred as negative taxes.. here generally the govt. lowers the market price..

For example- suppose the price of LPG cylinder is rs.250.. now for promotion measures it reduces the price to rs.200.. then demand increases but however it gives rs.50 for each cylinder to the manufacturer.. this rs.50 is called the subsidies provided by the govt.

Parag said: (May 25, 2012)  
Subsidies is the balancing mechanism in order the bring the Average Purchasing Power on par with the Market Price.
In economics, subsidy is a necessity because it acts as a catalyst in increasing the demand.
The Politics of Subsidy is that, it helps to achieve one of the principles of Directive principles of State Policy.
Also, subsidy cannot be abolished but it can certainly be rationalized.

Jyotish Barman said: (Sep 30, 2017)  
The answer should be A.

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