{"id":29129,"date":"2026-09-02T17:51:05","date_gmt":"2026-09-02T12:21:05","guid":{"rendered":"https:\/\/vajiramandravi.com\/upsc-exam\/?p=29129"},"modified":"2026-09-02T17:51:05","modified_gmt":"2026-09-02T12:21:05","slug":"subsidy","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/upsc-exam\/subsidy\/","title":{"rendered":"Subsidy, Meaning, Types, Objectives, Benefits, Challenges"},"content":{"rendered":"<p><span style=\"font-weight: 400\">A subsidy is an important fiscal and economic policy instrument through which the government provides financial or economic support to individuals, households, firms, or specific sectors. It aims to reduce the cost of essential goods and services, promote economic activity, address market failures, and advance social welfare and developmental objectives. In India, subsidies play a significant role in supporting agriculture, food security, education, healthcare, energy, and renewable energy, particularly for vulnerable sections of society.<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">However, while subsidies can improve affordability, encourage investment, and promote inclusive growth, poorly targeted or excessive subsidies may create fiscal pressures, distort market incentives, and lead to inefficient resource allocation. Therefore, effective subsidy design requires a balance between social protection, economic efficiency, fiscal sustainability, and long-term development.<\/span><\/p>\r\n<h2><span style=\"font-weight: 400\">Subsidy Meaning<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">A subsidy is financial aid given by the government to people, companies, or certain industries in order to lower the price of goods and services, encourage economic activity, and accomplish social welfare goals.\u00a0<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Direct cash transfers or indirect advantages like tax breaks, price support, or interest subsidies are examples of <\/span><span style=\"font-weight: 400\">how subsidies<\/span><span style=\"font-weight: 400\"> might be given.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Subsidies are a crucial fiscal policy tool in India that is used to boost affordability, assist disadvantaged groups in society, and promote development in high-priority industries like <strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/agriculture-in-india\/\" target=\"_blank\">agriculture<\/a><\/strong>, food security, education, healthcare, and renewable energy.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Subsidy and Transfer Payments difference<\/b><span style=\"font-weight: 400\">: A subsidy reduces the cost of a specific good, service or activity, such as <\/span><b>a fertiliser subsidy<\/b><span style=\"font-weight: 400\">, while a transfer payment provides direct financial support without a corresponding good or service, such as <\/span><b>pension payments<\/b><span style=\"font-weight: 400\">.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Objectives<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The introduction of subsidies addresses market failures, inclusive development, and economic progress. They support the affordability of necessities while promoting investment in industries that support the growth of the country. <\/span><b>The primary objectives of subsidies consist of:<\/b><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Make necessary products and services more accessible.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Help households that are vulnerable and have limited incomes.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Encourage increased agricultural output and food security.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Promote exports and the growth of industry.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Promote positive externalities and address market imperfections.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Encourage important fields like research and renewable energy.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Promote Employment and MSMEs:<\/b><span style=\"font-weight: 400\"> Support labour-intensive sectors, entrepreneurship and MSME competitiveness.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Minimise Socio-economic and Regional Disparities:<\/b><span style=\"font-weight: 400\"> Improve access to essential goods, services and economic opportunities.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Types In India<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The type of subsidy depends on the goal and recipient; the government offers a variety of subsidies. In general, subsidies fall into the following groups:<\/span><\/p>\r\n<h3><span style=\"font-weight: 400\">Based on Mode of Delivery<\/span><\/h3>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Direct Subsidy:<\/b><span style=\"font-weight: 400\"> Direct subsidies entail giving cash payments or Direct Benefit Transfers (DBT) to the recipient directly.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Examples:<\/b><span style=\"font-weight: 400\"> PM-KISAN income support, LPG subsidies via DBT, Scholarship programmes.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>Indirect Subsidy<\/b><span style=\"font-weight: 400\">: Without directly providing money, indirect subsidies lower the price of goods or services. These consist of interest subsidies, tax breaks, and subsidised prices.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Examples:<\/b><span style=\"font-weight: 400\"> Fertiliser and electricity subsidies, interest reimbursement for student loans, tax incentives for taxes.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<h3><span style=\"font-weight: 400\">Based on Purpose\/Sector<\/span><\/h3>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Agriculture Subsidy:<\/b><span style=\"font-weight: 400\"> Agriculture subsidies are government financial support that reduce the cost of farm inputs and improve farmers\u2019 access to essential food and agricultural resources, thereby supporting farm incomes and food security.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Food Subsidy:<\/b><span style=\"font-weight: 400\"> Through the Public Distribution System (PDS) and the National Food Security Act (NFSA), food subsidies guarantee inexpensive access to necessary food grains.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Fertiliser Subsidy:<\/b><span style=\"font-weight: 400\"> In order to reduce cultivation expenses and promote balanced nutrient application, the government subsidises fertilisers.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The Nutrient Based Subsidy (NBS) framework applies to P&amp;K fertilisers, while urea is governed separately under the urea pricing policy.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>Fuel Subsidy: <\/b><span style=\"font-weight: 400\">For qualifying households, fuel subsidies lower the price of necessary fuels like LPG.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Interest Subsidy:<\/b><span style=\"font-weight: 400\"> To make borrowing reasonable, the government pays a portion of the interest due on loans.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Examples:<\/b><span style=\"font-weight: 400\"> Loans for education, housing and agriculture<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Export Subsidy:<\/b><span style=\"font-weight: 400\"> India uses WTO-compatible mechanisms such as RoDTEP and duty drawback to neutralise embedded duties and taxes on exports and improve export competitiveness.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Production Subsidy<\/b><span style=\"font-weight: 400\">: Production subsidies lower manufacturing costs and boost output in high-priority industries.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy and WTO<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/world-trade-organisation\/\" target=\"_blank\"><strong>World Trade Organisation<\/strong><\/a> (WTO) Agreement on Agriculture regulates agricultural subsidies to limit trade distortion while allowing governments, particularly developing countries, adequate policy space for food security and rural development. WTO classifications of agricultural subsidies are<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Green Box<\/b><span style=\"font-weight: 400\">: Includes support with no or minimal trade-distorting effects, such as agricultural research, training, infrastructure and certain food-security programmes. These measures are generally exempt from reduction commitments.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Amber Box<\/b><span style=\"font-weight: 400\">: Covers domestic support measures that distort trade or production and are not otherwise exempt, including certain market price support and production-linked support.\u00a0<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Such support is subject to WTO disciplines and, where applicable, reduction commitments.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>Blue Box:<\/b><span style=\"font-weight: 400\"> Covers certain direct payments linked to production-limiting programmes and is exempt from reduction commitments when specified conditions are met.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>De minimis support<\/b><span style=\"font-weight: 400\">: Developing countries generally have a 10% de minimis limit for product-specific and non-product-specific trade-distorting domestic support, subject to the WTO rules<\/span><\/li>\r\n<\/ul>\r\n<h3><span style=\"font-weight: 400\">India and WTO<\/span><\/h3>\r\n<p>India acts as both a defender of developing nations and a key participant in global trade talks.<\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>India's concern:<\/b><span style=\"font-weight: 400\"> India's major concern is that MSP-based government procurement and public stockholding for food security can be treated as trade-distorting support under the existing WTO methodology. The calculation uses an external reference price based on 1986\u201388, which India argues does not adequately reflect present-day prices and inflation.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Public Stockholding and the WTO Peace Clause:<\/b><span style=\"font-weight: 400\"> At the <\/span><b>2013 Bali Ministerial Conference,<\/b><span style=\"font-weight: 400\"> WTO members agreed to an interim <\/span><b>Peace Clause<\/b><span style=\"font-weight: 400\"> under which developing countries' public stockholding programmes for food security would not be challenged through WTO dispute settlement for exceeding certain domestic-support limits, provided the stipulated conditions and transparency requirements are met.\u00a0<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The mechanism continues until a permanent solution is agreed.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">India has invoked this mechanism in relation to its rice support.\u00a0<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">In 2019, the government stated that the Peace Clause protects India's public stockholding programme until a permanent solution is reached.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>India's Position at the WTO:<\/b><span style=\"font-weight: 400\"> India, along with other developing countries, advocates a permanent solution on public stockholding for food security.\u00a0<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Its broader position is that developing countries should retain sufficient policy space to support farmers, maintain food reserves and address hunger without being constrained by outdated calculations.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Importance<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">Subsidies significantly contribute to inclusive growth by assisting disadvantaged groups and stimulating investment in high-priority industries. When well-designed, they lessen regional and income inequality while increasing economic welfare. <\/span><b>The following are the main advantages of subsidies:<\/b><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Guarantees Food Security:<\/b><span style=\"font-weight: 400\"> Food subsidies improve nutritional security by giving economically disadvantaged groups access to reasonably priced food grains.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Encourages Farmers:<\/b><span style=\"font-weight: 400\"> Fertiliser, irrigation, energy, and seed subsidies lower production costs and raise agricultural revenues.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Diminishes Poverty:<\/b><span style=\"font-weight: 400\"> By reducing the cost of necessities, subsidies increase the purchasing power of low-income households.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Encourages Industrial Development: <\/b><span style=\"font-weight: 400\">Capital subsidies, production incentives, and tax breaks all promote investment and boost competitiveness.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Promotes Employment:<\/b><span style=\"font-weight: 400\"> Well-designed support to labour-intensive sectors, MSMEs, and emerging industries can encourage investment and employment generation.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Enhances Human Resources:<\/b><span style=\"font-weight: 400\"> Subsidies for healthcare and education improve access to high-quality services, leading to a workforce that is healthier and more competent.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Corrects Market Failures: <\/b><span style=\"font-weight: 400\">Subsidies can promote goods and services with positive externalities or address affordability and information-related market failures.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Promotes Green Transition: <\/b><span style=\"font-weight: 400\">Subsidies and financial support for renewable energy, electric mobility and sustainable agriculture can accelerate the transition towards a low-carbon economy.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Challenges<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">Despite the fact that subsidies greatly advance social welfare and economic growth, their implementation frequently encounters a number of administrative and financial difficulties.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Excessive Fiscal Burden:<\/b><span style=\"font-weight: 400\"> Big subsidy packages restrict fiscal room for capital investment and raise government spending.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Corruption and Leaks: <\/b><span style=\"font-weight: 400\">Benefits may be diverted, and ineligible beneficiaries may be included as a result of inadequate monitoring mechanisms.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Inadequate Targeting:<\/b><span style=\"font-weight: 400\"> Sometimes non-deserving households receive subsidies rather than the intended recipients.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Distortions in the Market:<\/b><span style=\"font-weight: 400\"> Overconsumption of resources like energy, water, and fertilisers may be encouraged by artificially low prices.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Culture of Dependency: <\/b><span style=\"font-weight: 400\">Long-term reliance on subsidies may lessen the incentives for productivity, creativity, and independence.<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Misallocation of Resources:<\/b><span style=\"font-weight: 400\"> Overall efficiency is decreased by universal subsidies, which frequently benefit wealthy segments more than disadvantaged ones.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Environmental Issues:<\/b><span style=\"font-weight: 400\"> Fertiliser, energy, and irrigation subsidies may promote overuse of natural resources, resulting in pollution, groundwater depletion, and soil deterioration.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Crowding Out Productive Expenditure:<\/b><span style=\"font-weight: 400\"> Large and persistent subsidies may reduce fiscal space for capital expenditure, <a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/infrastructure\/\" target=\"_blank\"><strong>infrastructure<\/strong><\/a>, health, education and other productivity-enhancing investments.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Governmental Initiatives<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The government has implemented several modifications in the administration of subsidies in order to increase efficiency and decrease leaks.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Direct Benefit Transfers (DBT):<\/b><span style=\"font-weight: 400\"> Reduces leaks and increases transparency by directly depositing subsidy funds into beneficiaries' bank accounts.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>JAM Trinity:<\/b><span style=\"font-weight: 400\"> The distribution of targeted subsidies has been strengthened by the integration of mobile, <strong><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/aadhaar\/\" target=\"_blank\">Aadhaar<\/a><\/strong>, and Jan Dhan accounts.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Aadhaar-based Authentication:<\/b><span style=\"font-weight: 400\"> Aids in getting rid of phoney and duplicate beneficiaries.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>PM-KISAN:<\/b><span style=\"font-weight: 400\"> uses DBT to give qualified farmers direct income support.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>One Nation One Ration Card (ONORC):<\/b><span style=\"font-weight: 400\"> guarantees migrant beneficiaries' food subsidies are transferable between states.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Nutrient-Based Subsidies (NBS): <\/b><span style=\"font-weight: 400\">links subsidies to nutrient content to promote balanced fertiliser use.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Fertiliser Subsidy: <\/b><span style=\"font-weight: 400\">In order to lower cultivation expenses, promote balanced nutrient use, and increase agricultural production, the government offers fertilisers to farmers at discounted prices.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Subsidy on EV (electric vehicle):<\/b><span style=\"font-weight: 400\"> Under the National Electric Mobility Mission Plan, the government introduced the Faster Adoption and Manufacturing of Electric Vehicles (FAME India) Scheme to hasten the shift to clean mobility, which is no longer active.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>FAME-I: <\/b><span style=\"font-weight: 400\">It was established in 2015 to encourage the use of hybrid and electric cars. <\/span><span style=\"font-weight: 400\">It offered incentives for demand based on vehicle technology and battery capacity. <\/span><span style=\"font-weight: 400\">Also helped India's EV ecosystem get off the ground.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>FAME-II:<\/b><span style=\"font-weight: 400\"> Focuses on expanding the use of EVs, building infrastructure for charging them, and encouraging homegrown production. <\/span><span style=\"font-weight: 400\">Increases the incentives for electric buses, two-wheelers, three-wheelers, and four-wheelers.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li><b>PM E-DRIVE Scheme:<\/b> The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme was launched in October 2024<span style=\"font-weight: 400\"> as the government's subsequent EV-support programme.<\/span><\/li>\r\n\t<li style=\"list-style-type: none\">\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It provides <\/span><b>demand incentives for eligible electric vehicles<\/b><span style=\"font-weight: 400\">, particularly electric two-wheelers, three-wheelers and certain other categories.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The scheme also supports the deployment of <\/span><b>public charging infrastructure<\/b><span style=\"font-weight: 400\">, especially in cities and along selected highways.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It provides support for the <\/span><b>procurement of electric buses<\/b><span style=\"font-weight: 400\">, helping accelerate the electrification of public transport.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>Subsidy on Solar Panels: <\/b><span style=\"font-weight: 400\">To encourage the adoption of renewable energy, the government provides financial assistance for installing <\/span><b>grid-connected rooftop solar systems<\/b><span style=\"font-weight: 400\">.<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>PM-Surya Ghar-Muft Bijli Yojana:<\/b><span style=\"font-weight: 400\"> Under the scheme, central financial assistance (subsidy) of up to \u20b978,000 is provided to residential houses for installing rooftop solar panels ranging from 1 kW to 3 kW or more<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>PM-KUSUM:<\/b><span style=\"font-weight: 400\"> Under the scheme, farmers are given a subsidy of 60% to 90% on the total cost for installing solar pumps and solarisation of grid-connected pumps.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy Way Forward<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The effectiveness of solar subsidies depends not only on financial assistance but also on faster implementation, easier access, reliable technology, consumer awareness and stronger coordination among stakeholders.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Simplify the application process<\/b><span style=\"font-weight: 400\">: Make subsidy applications, documentation, verification and disbursement largely digital and time-bound to reduce delays for beneficiaries.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Ensure faster subsidy disbursement<\/b><span style=\"font-weight: 400\">: Link subsidy release with installation and DISCOM verification through an integrated digital system so that eligible households receive financial assistance without prolonged waiting. The existing rooftop-solar framework already provides for direct transfer after successful installation and verification.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Strengthen DISCOM capacity<\/b><span style=\"font-weight: 400\">: Provide incentives and performance-based targets to DISCOMs for faster approvals, net metering, inspections and grid connectivity.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Improve consumer awarenes<\/b><span style=\"font-weight: 400\">s: Conduct campaigns in rural and semi-urban areas explaining subsidy eligibility, installation costs, financing options, electricity savings and the application procedure.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Target subsidies better: <\/b><span style=\"font-weight: 400\">Prioritise households and regions where the financial barrier is highest, while avoiding unnecessary subsidies for consumers who can adopt solar without substantial government support.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Strengthen state-level implementation<\/b><span style=\"font-weight: 400\">: Ensure timely availability of state contributions, better coordination between MNRE, state governments, DISCOMs, banks and local bodies, and regular monitoring of scheme targets.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Use local bodies for last-mile outreach:<\/b><span style=\"font-weight: 400\"> Panchayats and urban local bodies can help identify beneficiaries, conduct awareness campaigns and facilitate rooftop installations. PM-Surya Ghar specifically provides incentives<\/span><b> to local bodies<\/b><span style=\"font-weight: 400\">.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">Subsidy UPSC PYQs<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\"><strong>Q1.<\/strong> What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies. <\/span><b>(UPSC Mains 2023)<\/b><\/p>\r\n<p><strong>Q2. <\/strong><span style=\"font-weight: 400\">How do subsidies affect the cropping pattern, crop diversity, and economy of farmers? What is the significance of crop insurance, minimum support price, and food processing for small and marginal farmers?<\/span><b> (UPSC Mains 2017)<\/b><\/p>\r\n<p><span style=\"font-weight: 400\"><strong>Q3.<\/strong> In what way could the replacement of price subsidy with Direct Benefit Transfer (DBT) change the scenario of subsidies in India? <\/span><b>(UPSC Mains 2015)<\/b><\/p>\r\n<p><span style=\"font-weight: 400\"><strong>Q4.<\/strong> With reference to the provisions made under the National Food Security Act, 2013, consider the following statements:<\/span><b> (UPSC Prelims 2018)<\/b><\/p>\r\n<ol>\r\n\t<li><span style=\"font-weight: 400\"> The families coming under the category of \u2018below poverty line (BPL)\u2019 only are eligible to receive subsidised food grains.<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> The eldest woman in a household, of age 18 years or above, shall be the head of the household for the purpose of issuance of a ration card.<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Pregnant women and lactating mothers are entitled to a \u2018 take-home ration\u2019 of 1600 calories per day during pregnancy and for six months thereafter.<\/span><\/li>\r\n<\/ol>\r\n<p><span style=\"font-weight: 400\">Which of the statement\/s given above is\/are correct?<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">a) 1 and 2<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">b) 2 only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">c) 1 and 3<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">d) 3 only<\/span><\/p>\r\n<p><b>Ans:<\/b><span style=\"font-weight: 400\"> (b)<\/span><\/p>\r\n<p><span style=\"font-weight: 400\"><strong>Q5.<\/strong> In India, which of the following can be considered as public investment agriculture? <strong>(<\/strong><\/span><strong>UPSC Prelims 2020)<\/strong><\/p>\r\n<ol>\r\n\t<li><span style=\"font-weight: 400\"> Fixing Minimum Support Price for agricultural produce of all corps<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Computerisation of Primary Agricultural Credit Societies<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Social Capital development<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Free electricity supply to farmers<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Waiver of agricultural loans by the banking system<\/span><\/li>\r\n\t<li><span style=\"font-weight: 400\"> Setting up of cold storage facilities by the governments<\/span><\/li>\r\n<\/ol>\r\n<p><span style=\"font-weight: 400\">Select the correct answer using the code given below:<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">a) 1, 2 and 5 only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">b) 1, 3, 4 and 5 only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">c) 2, 3 and 6 only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">d) 1, 2, 3, 4, 5 and 6<\/span><\/p>\r\n<p><span style=\"font-weight: 400\"><strong>Ans:<\/strong> (c)<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>A subsidy is financial support given by a government or another organisation to a person, business, or industry to lower costs and keep prices affordable. Know its types, benefits and challenges.<\/p>\n","protected":false},"author":35,"featured_media":29148,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[38,30],"tags":[40,1974,1033],"class_list":["post-29129","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-notes","category-upsc-economy-notes","tag-quest","tag-subsidy","tag-upsc-economy-notes"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/29129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/comments?post=29129"}],"version-history":[{"count":5,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/29129\/revisions"}],"predecessor-version":[{"id":29159,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/29129\/revisions\/29159"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media\/29148"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media?parent=29129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/categories?post=29129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/tags?post=29129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}