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A subsidy is a payment by government to certain businesses to help them survive or to give them an advantage in competing with companies from other nations or industries.  Sometimes the subsidy can be direct, as in the case of cash payments to farmers, and sometimes it can be indirect, as in the case of building a transcontinental railroad.

A '''subsidy''' is a payment by government to certain businesses to help them survive or to give them a competitive advantage.  Sometimes the subsidy can be direct, as in the case of cash payments to farmers, and sometimes it can be indirect, as in the case of building a transcontinental railroad.

 

Subsidies can also be given out by individuals or non-governmental institutions, but this is more commonly referred to as charity.