Agricultural Subsidies and Their Long-Term Effects on Indian Economy
DOI:
https://doi.org/10.53573/rhimrj.2026.v13n04.001Keywords:
Agricultural subsidies, Indian economy, Minimum Support Price (MSP), input subsidy, fiscal deficit, sustainabilityAbstract
Agricultural subsidies have been a central component of India’s rural development strategy since independence, aimed at ensuring food security, supporting farmer incomes, and promoting agricultural productivity. While these subsidies—covering inputs such as fertilizers, electricity, irrigation, and price support mechanisms—have contributed significantly to agricultural growth, their long-term effects on the Indian economy present a complex picture. This study critically examines the economic, environmental, and social implications of sustained subsidy regimes in India. It highlights how subsidies have led to fiscal burdens, inefficient resource use, distorted cropping patterns, and regional disparities. The overreliance on input subsidies has contributed to environmental degradation, such as groundwater depletion and soil fertility decline. Additionally, subsidies have often favored large farmers, exacerbating rural inequalities. The paper argues for a policy shift towards targeted, market-oriented, and sustainable subsidy frameworks that prioritize equity and long-term economic efficiency. Such reforms are essential to promote sustainable agricultural growth, rural welfare, and fiscal prudence in the evolving Indian economy.
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