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What is the importance of subsidization and where can it be utilized best?

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تم إضافة السؤال من قبل Abdul Rehman Zaheer , Marketing & Projects Specialist , King Fahd University of Petroleum & Minerals
تاريخ النشر: 2014/03/09
Khatim Abbas Seed
من قبل Khatim Abbas Seed , BUSINESS CONSULTANT , Google

Good question, as usual!

Subsidization is very important. I’ll assume you’re referring to Government subsidization?

 

Government subsidization generally aims to keep the price of certain goods, services & products artificially low, thereby enabling average income citizens to afford buying (and benefitting from) them. This can have positive impact on the overall well-being & purchase power of a population, thereby boosting economies in times of hardships. 

 

It may also have negative negative effects, though, that include increasing  the deficit spending of government & creating controversies as to better channeling of such subsidies towards standard heavy-cost high-demand posts like: infra-structure, education &  health care.

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