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What is Subsidy
A subsidy is a form of financial aid (grants) provided on an exact definition of the activity.

A subsidy is a form of financial aid (grant) provided on an exact defined activity.

Subsidies in practice: Subsidies are most often provided by the state (government subsidies) for some well-defined activity that is in the public interest. The subsidy may be provided to individuals, a particular organization or the whole industry. State subsidization may take the form of direct funding (such as funds, interest-free loan) or it may be indirect subsidy (e.g. in the form of tax relief, less depreciation, low interest loans, reduced customs duty or savings support, etc.). Consumers or producers may be subsidized.

Subsidies can be provided also by other subjects than just the state, such as foundations, non-government non-profit organizations and the like.

Related terms and methods:

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Last update: 26.04.2016


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