This document discusses the phases and types of subsidies in India. It describes subsidies as incentives that play an important role in economic development by optimizing resource allocation, stabilizing prices of essential goods and services, and redistributing income to help the poor. The document then outlines three phases of subsidy reform in India from 1996-2002, which gradually reduced and deregulated subsidies on petroleum products, fertilizers, and LPG. Finally, it lists six main types of subsidies used in India, including cash subsidies that provide goods at lower prices, interest subsidies, tax subsidies, in-kind subsidies, procurement subsidies, and regulatory subsidies.

1. A
Presentation
On
“Subsidy in India”

2. Subsidies in India
Subsidies are a kind of incentive which play an
important role in economic development of developing
countries. Subsidies bring out desired changes by
effecting optimal allocation of resources, stabilizing the
price of essential good & services, redistributing income
in favor of poor people thus achieving the twin objective
of growth & equity of nation.

3. Phases of subsidy
Phase – I (1996-98):
Rationalisation of retention margin of refineries,
deregulation of natural gas pricing, decantrlisation of
furnace oil and bitumen; partial deregulation of the
marketing sector, with freedom to appoint dealers and
distributors, removal of the subsidy on HSD and
reduction of the subsidy on kerosene, LPG and input for
fertiliser.

4. Phases of subsidy
Phase – II (1998-2000):
Pricing of indigenous crude on the basis of average f.o.b.
price of imported crude; rationalisation of royalty and
cess; further deregulation of the marketing sector,
further reduction of subsidy on kerosene, LPG and input
For fertiliser.

5. Phases of subsidy
Phase – III (2000-02):
Complete deregulation, including ATF, HSD and MS;
and the subsidy on PDS kerosene and domestic LPG to
be transferred to the general budget.

6. Different types of subsidy
1. Cash Subsidy: Providing food or fertilizer to consumer
at lower price.
2. Interest or credit subsidies
3. Tax subsidies
4. In kind subsidies
5. Procurement subsidies
6. Regulatory subsidy

7. Chart 1

9. Thank you…