Subsidies to the producers should be treated as transfer payments. Defend or refute the given statement with valid reason.
Subsidies to the producers should be treated as transfer payments. Defend or refute the given statement with valid reason.
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The given statement is defended
The subsidy is a transfer payment. The subsidy is the financial assistance provided by the government to producers to fulfill its social welfare objectives.
The government does not get anything in consideration for the same. It does not contribute to the current flow of goods and services and hence does not contribute to any value addition.
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