Subsidies are

"Grant" - the word of Latin origin and in translation means "donation", "gift". Today, there are several different interpretations of this term.

Subsidies are primarily intergovernmental transfers. They are provided irrevocably and free of charge. It does not matter the purpose and conditions for the use of funds.

Subsidies are also the money that organizations receive when their spending on the production and sale of manufactured products is greater than the profit from the sale of this product. These funds are allocated either from the local or from the state budget.

Subsidies are payments to the employee. In this case, they must be stipulated in a legislative act or an employment contract. So, for example, grants can be given to employees for food, travel for work, for underage children.

Subsidies are funds that can be used to compensate for increased costs and cover losses. Those enterprises to whom these funds are paid avoid bankruptcy. Due to the fact that payments that are allocated from the budget, offset some of the prices of individual goods and services. Thus, the increase in retail prices is prevented .

If subsidies for enterprises would not have been provided, then a significant part of the costs would have to be covered by consumers. This, in turn, would trigger a significant increase in consumer prices. At the same time, subsidies to prevent price increases are paid out of the budget. This leads to a deficit of budgets. In connection with this, an additional issue is formed, which can cause inflation.

In accordance with the type of economic structure in the country, subsidies are given one or the other position. So, if the state administration prevails, the application of such payments will be widely spread. Under the conditions of a market economy, subsidies are less in demand due to the existence of strict requirements for self-repayment and self-financing.

The producer, receiving a budget payment, acquires at the same time the opportunity to realize the products he produces in the prescribed amount at a cost that will interest the consumer, because it will not be overstated.

Payment of subsidies is carried out by enterprises with low profitability, but which have a great importance for the national economy. So, as a rule, payments are received by agricultural production, housing and communal services, socio-cultural institutions, and basic science.

If the country is dominated by a "closed" type of economy, then subsidies prevent price rises, the state, not the consumer, pays for the costs. In states where the "open" economy dominates , these payments help support national producers, stimulate domestic demand. Along with this, there is an increase in the employment of the population, an increase in the standard of living. Payments stimulate the production of socially significant products, services, works and their subsequent implementation at affordable prices for all segments of the population.

In this case, it is necessary to take into account the difference between the concepts of "subsidies", "subventions", "subsidies".

So, in the first case, a benefit is offered in kind or in cash, which is provided at the expense of the local or state budget.

A special type of monetary allowance from the state, allocated to the authorities for specific purposes and for a certain period, is called a subvention. In case of misuse of funds in this case, they are subject to return.

At the same time, all payments (subsidies, subventions, subsidies) are united by the fact that they are financed from the budget.