Agricultural subsidies
Agricultural subsidies · fertiliser, power, irrigation subsidies
12 min read · Updated 2026-05-25
What are Agricultural subsidies?
Agricultural subsidies are government transfers that lower input costs or support farm incomes. India's largest are the food subsidy (₹2.05 lakh crore budgeted for 2024-25) and the fertiliser subsidy (₹1.64 lakh crore), followed by state power subsidies, PM-KISAN's ₹6,000 a year, and PMFBY premium support. The WTO's Agreement on Agriculture sorts them into Amber, Blue and Green boxes.
The story
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).