Subvention
Subvention is a financial assistance provided by the government or other organization to an individual or company, typically in the form of a payment or tax reduction. It is a policy designed to encourage particular behavior or industry growth.
Subvention meaning:
- Subvention: Financial assistance provided by a government or organization to individuals or businesses.
- Subvention: A payment or tax reduction given to encourage certain activities or industries.
- Subsidized: An item or service that is provided at a lower than market cost due to government subsidy.
Examples of subsidization:
- A government subsidy for renewable energy production.
- A tax deduction for businesses that invest in new equipment.
- A government incentive for people to purchase electric cars.
Goals of subsidization:
- To stimulate economic growth
- To promote employment
- To increase production
- To encourage innovation
- To correct market failures
Criticisms of subsidization:
- Unequal distribution of benefits
- Distortion of market competition
- Cost-effectiveness
Overall, subvention is a complex policy tool with both potential benefits and drawbacks.
FAQs
What is the meaning of the word subvention?
Subvention refers to financial support or assistance, often provided by a government or an institution, to help an organization, project, or individual achieve specific objectives. It is typically used in contexts such as subsidies or grants.
What are subvention schemes?
Subvention schemes are financial arrangements where a third party, such as a government, employer, or developer, partially or fully bears the cost of a loan’s interest or provides monetary assistance to reduce the financial burden on the borrower or beneficiary.
What is an example of a subvention?
An example of subvention is a government providing financial support to farmers through reduced interest rates on agricultural loans. Another example is a real estate developer paying the interest on a home loan for buyers during the construction phase.
What is the difference between subsidy and subvention?
A subsidy is direct financial aid or relief provided to lower the cost of goods or services for consumers, whereas a subvention is broader financial assistance, often aimed at supporting specific industries, projects, or economic activities.
What is 3% interest subvention?
A 3% interest subvention means that the interest rate on a loan is reduced by 3%, with the difference being covered by a third party, such as the government or an organization, to make borrowing more affordable.
