Question

Cooking gas (LPG) at lower rate is an example of

• A. Subsidy
• B. Direct tax
• C. Indirect tax
• D. None of these

Hint:

A subsidy is a government payment to encourage the production or consumption of a good, typically to make essential goods more affordable.

Answer 1

The Correct Option is A

Step 1: Understanding subsidy.
A subsidy is a financial assistance provided by the government to lower the cost of a good or service for the consumer. In this case, the government provides subsidies for cooking gas (LPG) to make it more affordable for consumers.

Step 2: Analyzing the options.
(A) Subsidy: Correct. Subsidies are provided to reduce the price of goods and services like LPG.
(B) Direct tax: This is not correct, as direct taxes are taxes paid directly to the government, such as income tax.
(C) Indirect tax: This is also incorrect, as indirect taxes are levied on goods and services and paid indirectly by consumers, not through government assistance like a subsidy.
(D) None of these: This is incorrect, as the correct answer is (A) Subsidy.

Step 3: Conclusion.
The correct answer is (A) Subsidy, as subsidies are given to reduce the cost of goods and services such as LPG.