Government Subsidies to Indian Farmers

Government Subsidies to Indian Farmers

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The Indian government provides numerous subsidies to farmers in India for irrigation, fertiliser, seeds, equipment and export. The overall subsidy provided to Indian farmers makes up 2% of India's total GDP. Several of the subsidies provided by the Government of India to Indian farmers are described here.

1. Fertiliser Subsidy - Under the fertiliser subsidy, the government allows traders to acquire fertilisers from manufacturers and offer them to farmers at a reduced price. The difference is reimbursed to the merchant by the government. Through fertiliser subsidies, the government guarantees that farmers have access to high-quality fertilisers at reasonable prices. While also ensuring that the manufacturer and trader receive a fair return. The urea subsidy was allotted a sum of Rs. 63,222.32 crores by the GOI finance ministry of India for the fiscal year 2022-23.

2. Seed Subsidy - The government of India gives a subsidy to farmers for the purchase of seeds, and the amount varies depending on the crop. For cottonseed, the government pays a rebate of Rs 15 per kg or 25% of the entire order value. The available subsidy for certified distribution of seeds is Rs. 20/Kg.

3. Power Subsidies - Indian farmers receive an electricity subsidy, which varies by state. For example, in Gujarat, while residents pay Rs 8 per unit of power consumed, farmers pay only 60 paise per unit. While power is free for farmers in states such as Andhra Pradesh, Karnataka, Punjab, and Telangana.

4. Credit Subsidy - The government provides credit subsidies to farmers in a variety of methods, including waiving loan interest, erasing bad debts, and providing low-interest loans through regional rural banks (RRBs).

5. Subsidy for irrigation - Irrigation costs a large number of money since farmers must install a network of drips on their agricultural area. Drip pipe installation costs around Rs 45,000-60,000 per acre. As a result, the GOI offers farmers discounts on irrigation equipment like as pumps and drip lines.

6. Water subsidy - The government's water subsidy programme strives to ensure that every farmer receives clean pumped water. To that end, the GOI is building new canals and dams to facilitate water management.