Subsidy

noun (plural: subsidies)

/ˈsʌbsɪdi/

A financial benefit provided by the government to producers or consumers to reduce the market price of a good or service, promote a particular economic activity, or support vulnerable sections of the population — examples include food subsidies (through PDS), fertiliser subsidies, fuel subsidies, and interest subsidies on loans.

✍️ Usage in a UPSC answer

While agricultural subsidies have undeniably cushioned smallholder farmers against price volatility, their open-ended expansion has strained fiscal space and distorted cropping patterns, making rationalisation through direct benefit transfer a pressing imperative of welfare reform.

Synonyms

grantsubventionallowanceassistanceaidbounty

Antonyms

taxlevysurchargetariff

🌱 Word Family

subsidize (v), subsidized (adj), subsidizing (v pres.p), subsidization (n), subsidies (n pl)

🔡 Root

Latin subsidium = aid, reserve troops; sub- = under, behind + sedēre = to sit; -y = noun suffix

📜 Etymology

From Latin subsidium ("help, aid, reserve troops"), from sub- ("under, behind") + sedēre ("to sit") — originally referring to reserve troops stationed behind the front lines as backup support.

🧠 Memory Hook

Think "SUB- (under) + SIT": a subsidy is money that sits underneath an industry, propping it up so it does not collapse — financial support that "sits under" the recipient.

📝 Seen in UPSC Question Papers

Prelims 2011 — External Sector
Mains 2015 · GS3 · 12.5 marks — Economy
Mains 2014 · GS2 · 12.5 marks — Governance
Mains 2013 · GS3 · 10 marks — Agriculture

Real UPSC previous-year questions whose text uses “Subsidy” — proof this word earns its place on your list.

💰 Indian Economy 📖 Seen in: National Income & Economic Indicators ...

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