Subsidy: What it means & major government subsidies to look at!

A subsidy is an incentive given by the government to households and businesses on certain goods and services. The subsidy can be provided in the form of cash, grants, or through tax reductions. The subsidy is granted to make these goods and services more accessible to the consumers without causing a loss to their producers. Subsidies can be considered as the opposite of a tax or a tariff.

The goods and services which attract subsidies from the government are the ones that are essential for consumers. These include food, fuel, fertilizers, and other essential items. The government may also provide subsidies to businesses to promote manufacturing in an economy.

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