Subsidy Is A Sum Of Money Allocated By The Government

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Introduction According to online Oxford Dictionary, subsidy is a sum of money allocated by the government or state with the intention to help industries to keep their commodity’s prices low [1]. On the other hand, subsidy rationalization is an initiative where the government would slowly and properly increases the prices of subsidized items such as fuel energy and food to save cost [2]. In Malaysia, items for example, natural gases and sugar have been subsidized by the government for over a few decades ago. Malaysian government volunteered to give subsidy is because they want to help Malaysian people to live an easier life. These subsidies could provide a better living for Malaysian people is because with the help of these subsidies, people in Malaysia pay lesser than they supposed to pay and therefore, enabling them to save a lot of money in long run. It is a good news for Malaysia’s citizens to hear about the implementation of subsidies but for Malaysian government, it is the other way round. These subsidies which Malaysian government provides are considered as expenditures for Malaysia and it leaves a significant effect in Malaysia’s national budget. Besides, these subsidies also affect Malaysia’s fiscal deficit and increasing its national debt. In order to provide Malaysia a better future, an immediate and effective plan needs to be carried out such as rationalising the subsidies in Malaysia. Discussion 1.0 Purpose of rationalising subsidies in Malaysia We
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