Definition
A subsidy is financial assistance provided by a public institution or another organisation to support an activity, investment, cost or defined group of beneficiaries.
Human Explanation
It reduces a cost or covers some or all of an approved expense.
Why it Matters
Subsidies can improve project viability, accelerate development and support public policy objectives.
Conceptual Boundary
A subsidy is usually conditional. It is governed by eligibility criteria, permitted uses and evidence that the funds were used correctly.
Practical Perspective
Check eligible costs, the funding rate, required own contribution, payment arrangements and the risk of repayment or clawback.