What are the major forms of subsidies that governments grant

What are the major forms of subsidies that governments grant to domestic producers? Provide 2 real-world examples of subsidies given to a firm, or firms, which compete globally. Need citations

Solution

When a government provides assistence to the domestic producers, consumers or economic sectors , it can be said as subsidy. For the producers, it can lead to enchance their competitive advantage through low cost raw material such as the Saudi government provides feedstocks to domestic petrochemicals at discounted rates that makes them the lowest cost producers petchem firms in the world and put them at very benefit as compared to global petchem firms. Another way can be through financial assitance in terms of subsidy on interest rate on the loans taken by the small scale firms to encourage them to go to higher level.

Another form of Subsidy can be the low electricity and water tarrifs for the domestic produers so that they can again have the low cost advantage.

Tax concession is also can be considered as one type of subsidy.