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Government Subsidies in India*
Introduction
An item central to government expenditure, mostly of an uneconomic nature is subsidies. The subject matter of subsidies has become a controversial one among political parties that try to capitalize on them whenever reductions or withdrawals have to be made in them due to economic compulsions. Since withdrawal of subsidies which a sizeable section of the country’s population has been enjoying for years causes severe resentment against the party in power, opposition parties drag the matter of subsidies into electoral politics and try to gain political mileage out of the predicament caused to the government of the day. Whenever a Finance Minister reduces subsidies on some petroleum-based products ...
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