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Direct subsidies involve cash transfers or tax breaks that immediately impact a company or industry. Indirect subsidies do not have a specific cash value or involve payments of cash. These can instead include making it easier to obtain inputs or reducing costs in other ways.

To pay part of the cost of something: £50 would help to subsidize the training of an unemployed teenager. The refugees live in subsidized housing provided by the authorities. All private universities are subsidized by the government.

Key Takeaways. A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.

: furnished with a subsidy : paid for with the assistance of a subsidy (such as a grant of public or private money)

In the most general terms, a subsidy can be. defined as any government assistance that (i) allows consumers to purchase goods. and services at prices lower than those offered by a perfectly competitive private.

Subsidize The state subsidizes housing for low-income families. She feels that private businesses should not be subsidized by taxpayers. The company subsidizes health insurance for its employees. subsidized agriculture/housing.

: to aid or promote (someone or something, such as a private enterprise) with public money. subsidize soybean farmers. subsidize public transportation.

Synonyms of subsidy (noun money given to help another) aid. allowance. appropriation. assistance. bonus.