Subsidies are financial support or incentives given by governments, organizations, or individuals to promote specific economic or social activities. Subsidies are usually provided to offset the cost of production or to encourage the consumption of certain goods and services that are considered to be in the public interest.

Subsidies can take many forms, including direct payments, tax credits, reduced taxes, grants, loan guarantees, and other forms of financial assistance. They are often used to support industries that are considered strategically important, such as agriculture, energy, and transportation. Subsidies can also be used to promote specific social or environmental goals, such as promoting renewable energy or reducing greenhouse gas emissions.

While subsidies can have positive effects, such as promoting economic growth and supporting important industries, they can also have negative effects, such as creating market distortions, encouraging inefficient production, and creating dependency on government support. The effectiveness of subsidies depends on the specific context and goals they are intended to achieve.