Business Environment

Subsidies given by Government in Indian Economy

Introduction € Meaning of Subsidies € Benefits of subsidies

Types of Subsidies Direct Subsidies € Indirect Subsidies € Labor Subsidies € Infrastructure Subsidies € Trade protection (Import restrictions) € Export Subsidies (Trade Promotion ) € Procurement Subsidies € Consumption Subsidies € .

Subsidies given (1994-1995) Economic services:88% € Non-merit subsidies amount around 78%and that of merit is only 10% € Total non-merit subsidy for the Central and State governments taken together amount to Rs. 102145.24 € Subsidies on non-merit goods>= 5(merit goods) € .

a (1971-72 to 199697) In GDP.etc.explicit subsidies were 0. 30% of the total central subsidies Growth rate is 10% p.export subsidies.305% (1971-72) y It increased to 2.38% (1989-90) € Food subsidies y 70% of total explicit subsidies(1974-75) y The share is rising although in a cyclical pattren .Explicit subsidies € € € € Explicit subsidies include food and fertilizer.

Conclusion Adequate subsidies were given for the development of the nation by the central and state government in Indian economy € Effects of subsidies € y Allocative effects y Redistributive effects y Fiscal effects y Trade effects .

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