Agricultural subsidies

Story hook

Union Budget 2024-25. Major subsidies in the Centre's accounts:

• Food subsidy: Rs.2.05 lakh crore (NFSA + PMGKAY).
• Fertiliser subsidy: Rs.1.64 lakh crore.
• Petroleum subsidy (LPG + kerosene): Rs.12,200 crore.
• Crop insurance (PMFBY): Rs.15,864 crore.
• PM-KISAN income support: Rs.60,000 crore.

Add the state-level power subsidy for agriculture — ~Rs.1.5 lakh crore across all states (~Rs.40,000 cr Punjab + Tamil Nadu + AP + Telangana + Karnataka share alone) — and Indian agriculture support easily crosses Rs.4-5 lakh crore annually. That's higher than the entire defence budget.

Outside Delhi, the WTO ministerial meet at Abu Dhabi (Feb 2024) stalled — again — on the G33 + India peace-clause demand: a permanent solution for public stockholding for food-security purposes. The US, Canada, Australia argue India's procurement exceeds the 10% de-minimis product-specific support limit (rice at 90%+ of value of production). India invokes Bali 2013 peace clause to shield procurement.

For UPSC, "subsidy" is not just a fiscal number — it is the fault line of agricultural policy.

Why this matters for UPSC

GS-III tests subsidy reform every cycle: DBT, Nutrient-Based Subsidy, power-tariff reform, WTO boxes. Prelims: 2-3 marks/year on schemes + WTO Amber/Green/Blue Box. Mains: one 10-15 mark question per cycle. Topics overlap with Indian Economy (subsidy and fiscal deficit) + External Sector (WTO).