IOSR Journal of Humanities and Social Science (JHSS)
ISSN: 2279-0837, ISBN: 2279-0845. Volume 2, Issue 4 (Sep-Oct. 2012), PP 40-46 www.iosrjournals.org
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Agricultural Subsidies in India Boon or Curse
Rajwinder Kaur1 , Dr.Manisha Sharma2
1Researcher, Department of Economics, Punjabi University, Patiala (Punjab), India. E-mail: 2Assistant Professor, Department of Distance Education, Punjabi University, Patiala (Punjab), India. E-mail: Abstract: A progressive agriculture serves as a powerful engine of economic growth of any country. It helps in initiating and sustaining the development of other sectors of the economy. In view of this, after independence the Government of India adopted a positive approach and specific programmes like new agriculture technology were introduced. Indian farmers being poor were not in a position to buy these expensive inputs.Then the Indian Government started the scheme of subsidies on the purchase of various agriculture inputs to facilitate the farmers. Subsidies are often criticized for their financial burden, on the other hand there is a fear that agriculture production and income of farmers would decline if subsidies are curtailed. The findings indicate that the increasing rate of total subsidies (fertilizers, electricity and irrigation) is higher than gross cropped area (GCA) during pre, first as well as second phase of liberalization periods. There is a lot of variation to find out the relationship between gross cropped area (GCA) and in total subsidies in zones throughout the study period. The present study suggests that Government should keep aside its motive to please voters or strengthen the vote bank, it should frame rational policy in which small size category farmers, who are not actual beneficiaries of subsidies, could get more and subsides, which they do not want should be withdrawn. Keywords:-agriculture, electricity subsidy, fertilizers subsidies, irrigation subsidy, productivity. I. Introduction
The socio - economic structure, which prevailed prior to the British rule in the country, resulted in the organization of self-sufficient villages. It has been maintaining some kind of static equilibrium. The Indian peasant, though not properly educated, has adequate experience of farming systems and he has been dependent on it for the means of living. The Royal commission of Agriculture in India observed that both the methods of cultivation and social organization exhibit that settled order which is characteristic of all countries in which the cultivating peasant has long lived in and closely adapted himself to the conditions of a particular environment. The Indian agrarian economy on the eve of independence was critical in situation. It could be characterized totally primitive, deteriorative and turbulent. After partition, the country is left with 82 per cent of the total population of undivided India as well as only with 69 per cent of land under rice, 65 per cent under wheat and 75 per cent under all cereals. The deficiency of food grains is quite alarming and aggravating at that time (Chahal, 1999).
In view of this, after independence tremendous efforts are made to boost the economy through agriculture as one of the tools for development. The Government of India adopted a more positive approach and hence a well definedpolicy of integrated production programmes with defined targets and a proper distribution programme is adopted along with other measures for the overall economic development of the country. Specific programmes like new agriculture technology are introduced to convert agriculture into a successful and prosperous business, to bring more land under cultivation and to raise agriculture production. In India, the adoption of new agricultural technique is costly than that of traditional method of cultivation. In traditional method, inputs are least expensive, on the other hand, inputs in modern technology like high yielding varieties of...
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