SUBSIDY
Is the provision of financial and
Other resources by the government or the company,
In order to support
Entrepreneurial activity or person.
This allowance in cash or in kind is provided by the state at the expense of state or local budgets, as well as special funds to legal and physical persons, local authorities, other states.
C. There are direct (cash grants, interest-free loans, etc.) or indirect, indirect (writing off depreciation charges, discounts in rent, etc.).
C. are used for various purposes:
1) production C: subsidizing producers by the state to encourage and increase the production of certain products, by partially paying their production costs and sometimes financing losses. The goal here is to expand production at low prices.
A product that is considered the main (for example, a specific food product). Thus, consumers are subsidized;
2) Export C: Subsidizing
State exports in general or exports
Specific product in particular as a means of
Equalization of the country's balance of payments;
- C. Employment: subsidizing wage by the government to encourage private enterprises to organize more jobs;
- C. Income: Subsidizing individuals through the system of state benefits (for example, social insurance benefits), which allows people to have a minimum standard of living;
- Cross-subsidies: Enterprises also practice internal or cross-subsidization as a means of expanding their activities, for example, using profits from long-established products to finance the development of a new product and diversify into new product markets.
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