Raghav JhunjhunwalaAIR 4 · CSE 2025 · 267 wordsTheir whole copy
Opening · a figure
As per Agri Economist Ashok Gulati, India spends ~₹30,000 per ha on farm subsidy @ Punjab and Haryana.
| DIRECT SUBSIDIES | INDIRECT SUBSIDIES |
|---|---|
| (1) Directly given to farmers. Ex: DBT (PM KISAN) | (1) via channels; ultimately reach end goal farmer; Ex: = Power subs. = Fertilizer subs |
| (2) Explicit mention and thus, easier to calculate | (2) may be diff to quantify. |
| (3) Less Distortionary Effects on Economy. | (3) more distortionary and not lets reflect input prices. |
Impact on crop Diversity
Body · points and prose
- Indirect subsidy pre-dominance in India (Ex: MSP)
- monoculture of wheat & Rice (open procurement system)
- Reduced incentive for Energy Efficiency Ex: Fertilizer NPK 4:2:1 current 12:2:1
- Traditional & nutrient Rich crops pulses & millets: Reduced cultivation
Impact on Farm Economy
- Reduced Soil productivity (over use fertilizer & Irrigation)
- WTO disputes over Amber box (MSP)
- Reduced Crop Diversity and thus, constrained Farm Income
- Household Farm Debt (due to expensive inputs)
- Budgetery Pressure : > 6% Budget to subsidies.
Recent Improvements
(1) Punjab & Haryana: ₹17,500 per ha, explicit subsidy to move away from paddy crop. (2) PM-KISAN (DBT) (3) nutrient based subsidy (P, K)
Way Forward & Recommendations
(1) Promote PM PRANAM : Reduced use of chemical fertilizers. (2) PM KUSUM : solar panel for Green Energy Annadata → Urjadata (3) shift maximum subsidies to DBT basis (Surjit Bhalla) (4) Promote micro Irrigation
Close · a way forward
Thus, pertinent need to shift perverse subsidies into good subsidies. But, need to promote overall rural investments & farm employment.