The center reportedly wants to continue providing subsidy to consumers for cooking gas and kerosene for five more years. This is not good news from the point of view of reining in the fiscal deficit. Mounting subventions for subsidies means diversion of savings by the government from investment to consumption, raising the cost of capital in the process. The government must cut expenditure on subsidies to create more fiscal space for investments in both physical and social infrastructure. It should outline a plan for comprehensive reform in major subsidies including petroleum, food and fertilizers and set goal posts.
Which of the following is a conclusion which can be drawn from the facts stated in the above paragraph?
The center reportedly wants to continue providing subsidy to consumers for cooking gas and kerosene for five more years. This is not good news from the point of view of reining in the fiscal deficit. Mounting subventions for subsidies means diversion of savings by the government from investment to consumption, raising the cost of capital in the process. The government must cut expenditure on subsidies to create more fiscal space for investments in both physical and social infrastructure. It should outline a plan for comprehensive reform in major subsidies including petroleum, food and fertilizers and set goal posts.
Which of the following is a conclusion which can be drawn from the facts stated in the above paragraph?
The correct option is A Subsidy provided by the government under various heads to the citizen increases the cost of capital.
Subsidy increases the cost of capital.
Subsidy provided by the government under various heads to the citizen increases the cost of capital.
Subsidy increases the cost of capital.
