A subsidy is an incentive the government gives people or businesses through money, grants, or tax breaks to make more specific goods and services available. With subsidies, consumers can get goods and services at lower prices. Policy tends to favor markets with positive externalities, which are extra benefits to society, so there are more goods or services.
Generally, the government gives subsidies to specific industries to keep the prices of goods and services low so that people can afford them and encourage production and consumption. and with help of mobile now you can pay electricity bill online without visiting the electricity board office using Bajaj Finserv app.
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Different kinds of subsidies:
1. Subsidies for production
This kind of subsidy is given to encourage making a particular product. So that manufacturers can make more, the government pays for some of their parts. This lowers their costs and helps them make more at the same time. Because of this, production and consumption go up, but the price doesn’t change. The problem with this kind of incentive is that it might lead to too much production.
2. Subsidies for spending
When the government helps pay for things like food, education, health care, and water, this is what happens.
3. Export subsidy
Exports are a straightforward way for a country or state to make money and keep its economy in check. So, to encourage exports, the government pays a portion of the cost. But this is easy to take advantage of, especially by exporters who raise the prices of their goods so they can get a more significant incentive and, in the long run, make more money at taxpayers’ expense.
4. Employment subsidy
The government incentivizes businesses and organizations to make more jobs available.
Advantages of Subsidies
1. Getting prices down and keeping inflation in check
They are instrumental when it comes to production costs like fuel prices, significantly when crude oil prices rise worldwide. Many countries help pay for the cost of fuel so that prices don’t go up too much.
2. Stopping industries from going down for the long term
There are a lot of businesses that need to stay alive and running, like fishing and farming, because they are needed to keep people alive. Subsidies could also help out a lot of new industries that are increasing.
3. More goods on the market
Governments want to make it easier for their people to get food, water, and education. So, they offer an incentive, which could come from a tax credit or cash. Most of the time, these benefits go to markets with good externalities.
How to Get it?
Live in Delhi and have been getting an electricity subsidy for the past few years. You should know that the city government has decided that from now on, anyone who wants an electricity subsidy must sign up for it by October 1. Electricity customers of Delhi will now obtain the subsidy on their electricity bills on an opt-in basis from October 1. Chief Minister Arvind Kejriwal started the application process on Wednesday by giving people a number they can call to sign up for the subsidy.
Method 1: The Delhi government will send you a form with your electricity bill.
Please fill out the form and give it to where you pay your electric bill.
Method 2: To apply, call the number 70113111111 that the Delhi government has given out.
- To apply, you can send a missed call or say “Hi” on WhatsApp.
- Soon after this, an SMS with a link will be sent.
- When that link is clicked, a form will open.
- You fill out that form and send it in, and you’ll be added to the list of people who get subsidies.
- The government of Delhi will also send texts to people whose cell phone numbers are linked to their electricity bills.
- You’ll get an SMS or email three days after you apply to tell you that your subsidy is being processed.