While subsidies can provide significant benefits, they also come with challenges:
Fiscal Burden: Subsidies can be costly for governments, leading to budget deficits and increased public debt. Market Distortion: They can disrupt the natural market forces of supply and demand, leading to inefficiencies. Dependency: Businesses might become reliant on subsidies and fail to innovate or improve their efficiency. Misallocation: There's a risk that subsidies might be directed towards industries or businesses that do not need them or are not viable in the long term.