- Price Subsidies:
- Prone to leakages and diversion (e.g., fertilizer diversion to non-beneficiaries/industries).
- Can lead to inefficient consumption due to under-pricing.
- Wastes government resources.
- Direct Benefit Transfer (DBT):
- Increases efficiency by reducing government departments and distribution costs.
- Reduces leakages and diversion by direct transfer to bank accounts.
- Improves transparency.
- Income Support:
- Does not distort the market, leading to efficient resource allocation.
- Reduces leakages as money is directly transferred.
- Allows beneficiaries to decide spending, potentially increasing welfare.