On the consumer side, government subsidies can help potential consumers with the cost of a good or service, usually through tax credits. ... In this sense, consumer-targeted subsidies will not necessarily increase supply, since producers aren't being motivated or compensated to produce more.

Are government subsidies good or bad?

Since subsidies result in lower revenues for producers of foreign countries, they are a source of tension between the United States, Europe and poorer developing countries. While subsidies may provide immediate benefits to an industry, in the long-run they may prove to have unethical, negative effects.

Is subsidy bad for an economy?

In short, any subsidy that benefits women, the poor and the marginalised is good; their growth propels national growth. ... Similarly, subsidies for loans given for secondary agriculture initiatives reduce the burden on primary agriculture activities, and also help whittle down disguised unemployment in the agri-sector.