Have you ever wondered how a seemingly expensive venture got underway, when the people actually taking part in the project didn't seem to have much money to start with? An example of this would be if someone was to get in to a top level University - but they had very little financial backing behind them. Alternatively, imagine that a farmer wants to expand the size of his new operation, yet he doesn't have the funds to do so. Could he turn somewhere for help?
The answer is obvious. In this case, the farmer has 3 options. He could go to the bank and take out a loan, or he could apply for a private loan through an investor. The third option is that he could end up getting a government grant - which he would have to use towards the project, but which he wouldn't have to pay back.
Free money? Does that really exist? Not often, but when it comes government grants - it may indeed be that the seemingly impossible is made in to a very realistic scenario. Let's take a closer look.
Adding Value To A Country
Let's stick with the farmer story. We already know that the farmer wants to expand the size of his operation, and we also know that he is quite capable of doing so - if he got the financial backing for the project. Therefore, all that is missing here is the money.
There are basically 2 options. The farmer could continue doing what he is currently doing, and not progress the size of his business. In this case, no one would benefit - because the level of his revenue would be exactly the same as before, as would the quantity of products being produced.
However, if he was to receive a government grant, the value of his contribution to the overall economy would increase. Therefore, the government grant could indeed we warranted and worth it, because of the overall result from the increase in quantity of the product he is providing.
More Ways Than One
This idea obviously applies to more situations than that described above. The benefit of a government grant is that it is discretionary. You need to apply for funding, and your acceptance is based not on your past - but instead of the likelihood that the investment will be worth it for the future.