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Agriculture Input Subsidies (Support to Agriculture (Policy instruments…
Agriculture Input Subsidies
Support to Agriculture
Ensure food security
Enhance farmers income
Policy instruments
Input side - subsidised fertilizers, power, agri-credit, crop insurance
Output side - MSP
48% population depend on it
Issues
Decline in public capital formation, rise in input subsidies
Less money to spend for public expenditure
Cause large scale inefficiencies
Fertilizer subsidy - Imbalanced soil nutrients
Irrigation water - Inefficient use
Power - Lowering of groundwater table
Loans - used for non-agri purposes
Suggestions
Ensure leak-proof investment in public agriculture
Shift of subsidiary delivery from pricing policy to income policy- use of JAM
Investment towards R&D, roads and education
Way Forward
Need blend of investment and subsidies
Investment in R&D, roads and education 5-10 times more powerful in increasing agri-GDP