Question

Subsidy is

• A. discount
• B. repayment
• C. concession
• D. none of these

Hint:

Think of a subsidy as the government paying part of the cost for you. For example, with an LPG subsidy, the government gives a concession by paying a portion of the cylinder's price so that the consumer pays less.

Answer 1

The Correct Option is C

Step 1: Understanding the Question:
The question asks to define or categorize what a subsidy is.
Step 2: Key Concept:
A subsidy is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. It is a payment made by the government to producers or consumers.
Step 3: Detailed Explanation:
Let's compare subsidy with the given options:
- (A) Discount: A discount is a reduction in the usual price of a good or service, typically offered by the seller to the buyer to encourage sales. It's a business transaction, not a government policy.
- (B) Repayment: This refers to the act of paying back money that has been borrowed. A subsidy is a grant, not a loan, so it does not need to be repaid.
- (C) Concession: A concession is a grant of rights, land, or property by a government, local authority, corporation, individual, or other legal entity. In a financial context, it means a reduction in the amount of money that has to be paid, or an advantage given to a particular group. This is the closest in meaning to a subsidy. A subsidy is essentially a financial concession given by the government to keep prices low for consumers or to support producers.
Step 4: Final Answer
A subsidy is a form of financial concession provided by the government.