"subsidy" - a word of Latin origin and means "donation", "gift."Today there are several different interpretations of the term.
subsidies - is first and foremost intergovernmental transfers.They are permanently available and free of charge.It does not matter the purpose and conditions of use of funds.
subsidies - it's also money that get the organization when their spending on the production and sale of manufactured products more profit from the sale of this product.These funds are allocated or from the local or from the state budget.
subsidies - that payments to employees.In this case, they must be specified in a legislative act or an employment contract.For example, grants can be allocated to employees for meals, travel to work, to minors.
subsidies - a tool that can be used to compensate for the higher costs and cover the losses.Those companies that pay these funds avoid bankruptcy.Because the payments are allocated from the budget to compensate part of the prices of individual goods and services.This prevents an increase in retail prices.
If subsidies to enterprises would not be provided, then a substantial part of the costs would have to cover the consumers.This, in turn, would have triggered a significant increase in consumer prices.At the same time payment of subsidies to prevent the growth of prices carried out from the budget.This results in a budget deficit.In this connection, it formed an additional issue, which can cause inflation.
In accordance with the type of economic system in the country subsidies given to one or the other position.So, if the predominant public administration, the use of such payments will be distributed widely.In conditions of market economy, subsidies are less in demand because of the presence of strict requirements for self-sufficiency and self-financing.
Manufacturer, receiving payments from the budget, takes with it the ability to carry out the implementation of their manufactured products in the stipulated amount for the cost of that interest to the consumer, because it is not overpriced.
payment of grants made businesses with low profitability, but having great importance for the national economy.So, as a rule, payments received agricultural production, housing and communal services, social and cultural institutions, the fundamental science.
If a country dominated by a "closed" type of economy, subsidies prevent a rise in prices, the payment of expenses borne by the state, not the consumer.In states where the dominant "open" economy, allow these payments to support domestic producers, to stimulate domestic demand.At the same time there is an increase of employment, improvement of living standards.Payments to stimulate the production of socially important goods, services, works and their subsequent sale at affordable prices all the segments of the population.
This should take into account the difference between the concepts of "subsidy", "subsidy", "subsidy".
So, in the first case it is assumed benefits in kind or cash, which is granted by local or state budget.
subventions are a special kind of allowance from the state, authorities allocated for a specific purpose and for a specified period.If misuse of funds in this case, they shall be returned.
In this case all payments (subsidies, subventions, subsidies) are combined that are financed from the budget.
