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It is a subsidy of interest given by Government to certain sectors like Textiles, Farm,etc. How it works, For eg. Textile company borrow from Bank at 10% and Government gives subvention of 2%. Hence net bank takes interest from textiles companies 8%. Other sectors have to pay 10% to the bank.
Likewise, Farm or Agricturle sectors borrows from Bank at 10% and they will get 4% subvention from the govt.
This is how govt. promote the textile and agrictulture.
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∙ 13y ago
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