The document discusses subsidies in India, including their objectives, effects, and trends at the central and state government levels. Some key points: 1. Subsidies aim to induce higher consumption/production, offset market imperfections, and achieve social objectives like redistribution and population control. 2. They impact resource allocation, income redistribution, government finances, and trade. Subsidies have increased in India due to expanded government activities and weak cost recovery efforts. 3. Central government subsidies are mostly for economic services, with low recovery rates. Food and fertilizer subsidies account for 30% of the total. State government subsidies are split evenly between social and economic services, with an overall low 5.8%