A subsidy is that help or extraordinary financial aid that is granted by an official body to a person or group that shows that they need it to be able to satisfy their basic needs.
Financial assistance that someone receives from another so that they can satisfy their needs, so that they can acquire a good or service, among others
For instance, a disability benefit, an unemployment benefit, among the most recurrent.
Meanwhile, the subsidy in question may observe different objectives or missions, that is, a subsidy may have the purpose of stimulating the consumption of a certain good or service, the production of another good or service x, or simply be an economic aid for a period of time until a critical moment is overcome, a clear example of this type of subsidy is unemployment; An individual who is fired or is unemployed for any other reason, will receive the subsidy for 8 months, while if before that period he gets a job, he must notify him and the subsidy falls completely. "The Argentine government announced a new subsidy that will be destined to pregnant women.”
The state, a great giver of subsidies
States normally make use of this type of practice in order to achieve a certain social goal, for example, that all families can meet their basic needs or have access to the basic food basket; or on the other hand, as indicated above, they are also delivered with the aim of favoring, for different reasons, certain productive activities or regions of the country.
Also, it turns out to be a frequent practice for the government to provide subsidies to some companies so that they prevent them from increasing their prices and such a situation causes a very serious problem in consumption and in daily economies as a consequence that it is an extremely popular good or service. .
Among others we can cite the subsidy to some public transport, to companies that offer electricity and gas services, among others.
So, taking these considerations into account, we could say that the subsidy is the The difference between the real price of a service or a product and the price that the consumer pays to obtain it or access such a service, while the difference between the real value that the product or service costs and what the user or consumer pays it ends up assuming someone, a company, the state, among others. .
Subsidy classes
We may find two types of subsidies, demand subsidies (those intended to reduce the value paid by the user) and the supply subsidies (They are granted to service providers or producers).
And within the demand subsidies, we find two sub-categories: direct subsidies (They are those from which the state directly pays a part of the service in question) and the cross subsidies (The state will not charge all consumers the same amount, some will actually pay more than others.)
Voices for and against subsidies
On the subject of subsidies there are many controversies, always, in principle, in relation to who normally gives them, because many times, governments unfortunately make a discretionary use of them and most of the time they end up in the hands of those who they do not need them, or, failing that, people who also need them are neglected.
On the other hand, the subsidy is also severely questioned because many times it tends to become a gift to people, which is maintained over time and does not urge the person who receives it to improve their situation in life, because of course, you are comfortable with the perception of that subsidy.
And on the other hand, the person who delivers it also does nothing to motivate him, to encourage the individual who receives the subsidy to seek to get out of his situation.
For example, you are given an unemployment or large family subsidy but the corresponding follow-up of the person is not carried out in order, in addition to the subsidy, to give them tools and resources that help them to change their situation for the better, that is, to provide resources in addition to the money. that allow you to evolve in life, for example, study, in order to receive a degree and find a good job that improves your life.
And with regard to the subsidies that are delivered to companies to, for example, favor consumption, there are also often criticisms because in reality that is usually a double-edged sword if, at the same time, the government does not follow the policy with other measures that allow little by little to remove this subsidy.
Controversy scene in Argentina
In the Argentine Republic it has happened that with the subsidy that the state allocated until 2016 to public services such as electricity, water, and gas, a tremendous profitability problem was generated for the borrowing companies and the impossibility of them to allocate money for investments They improve them, of course the service got worse every time.
Starting with the government that took office at the end of 2016, an attempt was made to correct this problem by increasing rates, and of course, this generated severe problems in family economies and in those of companies that suddenly find themselves having to pay bills with amounts sidereal, which they cannot face and in the framework of a great inflationary situation in the country.
