Subsidies in India - Subsidies of State Governments

Subsidies of State Governments

Subsidies given by 15 non-special category States were estimated for 1993-94, the latest year for which reasonably detailed data were available for all these States. The trends thrown up by the study are:

  • Subsidies in social services and economic services both constitute half each of the total subsidies given by the States.
  • The proportion of merit subsidies is much higher in social services vis-à-vis economic services.
  • The overall recovery rate is 5.81% of the total cost (less than 2% in social services and approx. 9% in economic services).
  • There is a distinct tendency for the per capita subsidies to rise as the per capita incomes rise.
  • None of the 15 States spends more than 30-35% of total subsidies on merit goods.
  • The recovery rates for merit services show variation in a narrow band whereas the largest variations are recorded for recovery rates for non-merit economic services.
  • The near zero surpluses for all services show that subsidies are mainly financed by tax-revenues and borrowing in the States.
  • More than one-fifth of non-merit social subsidies accrue to education, sports and art & culture.
  • In economic services, irrigation accounts for nearly a quarter of services whereas power accounts for around 12%.
  • Lastly, subsidies to States' public enterprises are large but recovery in the form of interests and dividends is extremely low.

Read more about this topic:  Subsidies In India

Famous quotes containing the words state and/or governments:

    “But is it not the fact that religion emanates from the nature, from the moral state of the individual? Is it not therefore true that unless the nature be completely exercised, the moral state harmonised, the religion cannot be healthy?”
    —Harriet Martineau (1802–1876)

    “It has become necessary to call the attention of European governments to a fact which is apparently so insignificant that the governments seem not to notice it. The fact is this: an entire people is being annihilated. Where? In Europe. Are there witnesses? One witness, the entire world. Do the governments see it? No.”
    —Victor Hugo (1802–1885)