Characterstics of Price subsidies - Budget & Economic Survey
Q. Which of the following statement / s is / are correct regarding Subsidies?
1) Price subsidies are often regressive.
2) Price subsidies can distort markets in ways that ultimately hurt the poor.
3) Leakages seriously undermine the effectiveness of product subsidies.
4) Subsidies have helped poor households to weather inflation and price volatility.- Published on 06 Aug 15a. Only 2 and 3
b. Only 3 and 4
c. Only 1, 2 and 4
d. All of the above
ANSWER: All of the above
It is due to above reasons that converting all subsidies into direct benefit transfers is a laudable goal of government policy.
