What is a Subsidy?
The subsidy is a discount provided by the government to the general public in order to supply critical items at accessible costs across the country. The amount that the government grants to a unit/industry that sells subsidized items to the public is known as a subsidy. Subsidies are a type of government non-planned spending in which the cost of the subsidy is significantly lower than the actual cost of production.
Occasionally, the government would grant financial support as a subsidy to aid the poor or needy persons. For business loans and equipment purchases, the government periodically gives subsidies to farmers, manufacturers, and consumers. According to the Budget document, for 2020-21, The government’s food, fuel, and fertilizer subsidy bill has been pegged marginally higher by 0.23 percent at Rs 2,27,793.89 crore.
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