Originating in Latin subsidĭum, the concept of subsidy allows to identify a public assistance based on an economic aid or benefit . It is a system focused on stimulating consumption or production , or one help which is granted for a certain time. For example: "I will begin the procedures to collect the unemployment benefit", "The government announced a subsidy to promote the consumption of electronic products in the province".
The subsidy is used for achieve a social purpose (That, to cite specific cases, all families may have access to the basic food basket, that the lower classes are in a position to acquire a home, etc.) or to favor, for different reasons, certain productive activities or regions of a country .
Regarding this specific meaning, we have to say that, for example, in Spain this type of subsidy has become the fundamental piece of livelihood for many families. And is that the economic crisis that is going on has resulted in millions of citizens running out of work, so they need these monetary aids to be able to maintain their home and cover basic needs.
This notion could be defined as the difference that is noticed when comparing the real value of a product or benefit and the value paid by the consumer to access said product or service. In these circumstances, the government distributes subsidies to companies to prevent prices or rates from increasing: "The president decided to extend the subsidy to electricity companies to prevent further increases".
We cannot ignore the fact that the term we are addressing is widely used in Nicaragua to refer to the temporary leave suffered by a specific worker when he is suffering from a disease. Period, the one that lasts the leave, during which the said employee will continue to receive his corresponding salary.
It is possible to distinguish between offer subsidies (which are granted to producers or service providers) and demand subsidies (which allow reducing what the user pays).
Within the demand subsidies, there are direct subsidies (through which the State directly pay part of the service to consumers) and cross subsidies (The State does not establish a single rate for all consumers, but there are those who pay more for the service so that others can pay less).
And all this without forgetting that there are the so-called production subsidies that are those current payments that the government of a federal state makes to the different companies in the country due to the fact that they contribute to its production. Payments that, how could it be otherwise, are made proportionally to the aforementioned productive participation.
Formerly in the ecclesiastical field there was also what was known by the name of subsidy, although currently it is already in disuse. Then that term was used to refer to the aid that the Kings of Spain received from the cusp of religious organizations and that came to be in relation to what were the ecclesiastical income of the territories they governed.