A subsidy can be understood as a concession where the government pays some part of the cost of a commodity or service. This initiative is taken to help the economically deprived sections get access to these basic goods without adding to their financial burden.

Example:
Under Pradhan Mantri Ujjwala Yojana, the government provides a 200 rupee subsidy on twelve 14 kg gas cylinders. Thus, to the beneficiaries, the cylinder will cost around 800 rupees and not 1000.