Impact of Subsidies on Indian Agriculture

Abstract-Agriculture plays a crucial role in India’s economy, supporting approximately 55% of rural households and contributing about 18% to the nation’s GDP. At the time of independence, the agricultural sector was underdeveloped, with limited land dedicated to key crops. In response, the Indian government implemented programs to modernize farming by introducing high-yielding seed varieties, fertilizers, mechanization, and irrigation. However, higher the costs of these modern techniques presented challenges for many farmers. To make agricultural inputs more affordable to the farmer, the government introduced subsidies based on recommendations from the Food Grain Price Committee. While subsidies are essential for addressing market inefficiencies and promoting societal benefits like poverty alleviation and food security, they are often criticized for issues like poor targeting and governance challenges. In spite of this fact, subsidies have significantly influenced agricultural production, particularly during the Green Revolution. As India moves toward sustainable agricultural development, subsidies remain a vital tool for balancing economic, environmental, and social objectives.