- Social Equity:
- Provide essential goods and services at affordable costs to disadvantaged groups.
- Help poor households fight inflation and price volatility.
- Can be targeted to specific vulnerable sections of society.
- Examples: LPG subsidy, food subsidy through PDS.
- Economic Growth:
- Can incentivize production in key sectors (e.g., agriculture, manufacturing).
- Can reduce input costs for producers, making them more competitive.
- Can stimulate demand for certain goods.
- However, if distortive, they can hinder long-run growth.