Structure of Agricultural Input Subsidies in India

A subsidy is an important instrument of fiscal policy and it is necessary as a production accelerating catalyst for the farmers. The central and state governments provide assistance to the farmers by implementing different schemes. Among them, agricultural subsidy schemes play a major role in improving the socio-economic status of the farmers. There are several agricultural inputs subsidies like fertilizer subsidy, power subsidy, irrigation and credit subsidy etc., and these subsidies acts as incentives for the farmers to do farming.