Question

In the chapter ‘Indian Economy 1950-1990’, you might have studied about subsidies in various sectors, including agriculture. Some scholars argue that subsidy in agriculture should be removed to make the sector internationally competitive. Do you agree? If so, how can it be done? Discuss in class.

Answer 1

I do not think agricultural subsidies should be removed completely. Many small and marginal farmers depend on subsidies for fertilisers, electricity, irrigation and credit. However, we can gradually reduce unnecessary subsidies. To make Indian agriculture internationally competitive, the government should improve irrigation, storage, transport, technology, seed quality, and market access. Subsidies should be targeted mainly towards needy farmers. Thus, agricultural subsidies should be reformed and gradually reduced, but not completely removed.