If indirect taxes are ₹1,100 crore and net indirect taxes are minus ₹200 crore, what will be subsidies?
Answer and explanation
Correct answer: ₹1,300 crore
Use the identity net indirect taxes = indirect taxes − subsidies. Rearranging gives subsidies = indirect taxes − net indirect taxes. Substitution yields subsidies = 1,100 − (−200) = ₹1,300 crore. Therefore option C is correct. The negative net value means subsidies exceed indirect taxes; ₹900 crore results from incorrectly treating −₹200 as a positive amount, and ₹1,100 crore ignores the net adjustment.
Frequently asked questions
What is the correct answer to this question?
₹1,300 crore
Why is this the correct answer?
Use the identity net indirect taxes = indirect taxes − subsidies. Rearranging gives subsidies = indirect taxes − net indirect taxes. Substitution yields subsidies = 1,100 − (−200) = ₹1,300 crore. Therefore option C is correct. The negative net value means subsidies exceed indirect taxes; ₹900 crore results from incorrectly treating −₹200 as a positive amount, and ₹1,100 crore ignores the net adjustment.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - Market price and factor cost.
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