Answer:

There are major agriculture subsidies in India, - for fertilizer, electricity and irrigation. The subsidies are given on the basis of criteria like merit, income-level, social group etc. In all, subsidies accounts for roughly 2.5 per cent of India’s GDP. The govt. has taken a decision to limit the subsides to around 1.2 per cent of GDP by the final year of the 12th Plan.

Reasons in favour of the subsidies in agriculture

♤ Fertilizer subsidy is a development subsidy, which accelerate the fertilizer use and promotes agricultural production. Subsidies in fertilizer were reduced in the year 2003 and agricultural production gradually decreased as a result of that.

♤ The farmers are not able to purchase fertilizer on the higher price as production cost increases due to removal of agricultural subsidy. Thus, removal of subsidy would affect the agricultural sector and economy.

♤ Subsidies offer employment to unskilled workforce and contribute the human capital for agricultural needs. Government offers Minimum Support Prices (MSP) and provides facilities for proper warehousing and packaging facilities under agriculture subsidies.

♤ Seeds are distributed for subsidized rates and subsidies are also provided for farm mechanization to boost the agriculture productivity.

♤ Subsidies support seeds distribution, marketing facilities, farming techniques, new technology implementation and training methods, credit assurance, machinery, plant protecting, disaster management assured yearly crops to feed the every growing population.