Agricultural Subsidies in India

This research paper examines India's agricultural subsidy regime, focusing on the Minimum Support Price (MSP) and input subsidies for fertilizer, power, and irrigation. While these tools have been critical for food security and farmer livelihoods, they face criticism for inequity and environmental impacts. The author argues that subsidies are essential for small farmers and cannot be easily replaced by direct income transfers due to infrastructure gaps.

• India utilizes a price support system established in 1965, primarily through the minimum support price (MSP), to ensure food security and support farmer incomes. This system allows the government to procure stocks for the Public Distribution System (PDS), which provides subsidized food to 50% of urban and 75% of rural residents. The MSP covers 25 crops, with the highest procurement success seen in paddy (37% of production in 2021/22) and wheat (17% of production in 2021/22).
• Input subsidies for fertilizer, irrigation, and electricity are used to offset rising production costs. These subsidies grew from USD 25 billion in 2011 to USD 32 billion in 2021–2022, and reached USD 48 billion in 2022‣. Fertilizer and power are the largest components, accounting for 45.6% and 30% of all input subsidies, respectively, followed by irrigation (16.4%), credit (5.07%), and crop insurance (2.69%).

APA

Sengupta, R. (2024). Agricultural Subsidies in India. International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/agricultural-subsidies-india

Chicago

Sengupta, Ranja. Agricultural Subsidies in India. International Institute for Sustainable Development, 2024. https://www.iisd.org/articles/policy-analysis/agricultural-subsidies-india.

Wikipedia

{{cite report |last1=Sengupta |first1=Ranja |title=Agricultural Subsidies in India |publisher=International Institute for Sustainable Development |date=2 December 2024 |url=https://www.iisd.org/articles/policy-analysis/agricultural-subsidies-india |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sengupta2024agricultural, author = {Sengupta, Ranja}, title = {{Agricultural Subsidies in India}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = dec, url = {https://www.iisd.org/articles/policy-analysis/agricultural-subsidies-india}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }