On the Economics of Subsidies with a special note on fuel (HSO)subsidy for deepsea fishing vessels

Abstract

Subsidy is considered as negative tax in economic parlance. As tax imposed on a given product discourages (or is expected so) its production and consumption, a subsidy produces a reverse effect. Subsidy is a transfer payment. Hence it is not included in national product or income. But as far as expenditure is concerned, it becomes a part and parcel of the sources of financs to be spent on goods and services produced.