problem with subsidies Archives

Subsidies are one of the quintessential attributes of any state. When it comes to India, on the eve of independence was left with an uphill task of socio-economic development. Markets were almost nonexistent, the masses lived in abject poverty and illiteracy, we weren't producing enough food to satiate the hunger of the masses, and our lifespan was just 32 years. There was a crisis in every sphere -- agriculture, industry, health or education -- partly due to colonial legacy. Given such circumstances, the founding fathers of democratic India rightly envisaged the Indian state to be a state. However, 70 years down the road only a few problems have abated, while new ones cropped up and poverty still stubbornly remains a pressing problem. In this context, the latest economic survey rig...

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How Direct Benefit Transfers Can A solution To Problems Of Subsidies?

Pooja YadavMay 12, 20220

Though one of the benefits of subsidies is that the greater supply of products, a shortage of supply also can occur. this is often because lowered prices can cause a sudden rise in demand that several producers may find very hard to satisfy. Ultimately, it can result in very high demand which causes a rise in prices. Subsidies are usually effective and helpful. However, if the govt. were to form a report of its success in using subsidies, it might be a distinct story. this is often because it's hard to quantify the success of subsidies. How will the govt raise funds to use for subsidizing industries? after all, by imposing higher taxes. So, it's the final population and corporations who provide the means to enable the govt to subsidize industries. Given above are only few samp...