The paper examines the case for subsidies as a means of helping to meet basic needs, as compared with the direct support of incomes. In general, subsidies are justifiable where markets do not work well, where increased consumption provides external benefits, and where subsidies can be administered non‐selectively. This is most likely to be so with goods and services with a low income elasticity of demand among the wealthier members of the community. Food subsidies in particular, even if non‐selective, can be of help to the poor (although account must be taken of their impact on wages and employment). But where the income elasticity of demand for a good or service is high, non‐ selective subsidies will be regressive in their effect, while selective subsidies will favour only those with access to them.