Finance Minister Nirmala Sitharaman Reveals Economic Survey 2023-24
Decline in Food and Fertiliser Subsidies
The Economic Survey 2023-24, released by Finance Minister Nirmala Sitharaman, shows a significant reduction in expenditure on food and fertiliser subsidies. Food subsidies fell by 24.6% and fertiliser subsidies by 22.4% in FY24.
Reasons for Decline
The survey attributes the decline in fertiliser subsidies to the resolution of supply chain disruptions caused by the Russia-Ukraine conflict. Fertiliser prices returned to pre-conflict levels in FY24, resulting in lower subsidy outlay. Similarly, the additional food subsidy introduced to protect vulnerable populations has been gradually consolidated.
Role of Subsidies in Agriculture
Subsidies play a crucial role in influencing farmer behaviour, such as adopting better quality seeds and using appropriate fertiliser compositions. Between 2011-12 and 2020-21, subsidies to the agriculture sector more than doubled, with the fastest increase seen in fertiliser and power subsidies.
Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)
The PMKSY has provided financial assistance to build efficient supply chain management from farm to retail, reducing wastage of perishable produce. By March 2024, 1,044 projects were completed under PMKSY, with a total of 1,685 projects approved, involving a project cost of Rs 32.78 thousand crore and an approved subsidy of Rs 9.3 thousand crore.
Efforts to Reduce Chemical Fertiliser Use
The survey highlights efforts to reduce the use of chemical fertilisers in Indian agriculture. Although per-hectare usage of agricultural chemicals in India is lower than in most developed countries, the use of chemical fertilisers has increased over the years. The current subsidy structure has led to an increased application of urea, resulting in a nutrient imbalance. Revising subsidy policies to support all major nutrients (N, P, K) could incentivize farmers to adopt a more balanced fertiliser approach.
To promote precise fertiliser application, more than 1.79 lakh drone demonstrations were conducted across several states to build knowledge and capacity among farmers.
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is responsible for managing the country’s money, including taxes and spending. In India, this role is currently held by Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is an Indian politician who is the current Finance Minister of India. She helps make decisions about how the government spends money and collects taxes.
Economic Survey -: The Economic Survey is a report that the government releases every year. It tells us how the country’s economy is doing, including things like jobs, prices, and growth.
2023-24 -: 2023-24 refers to the financial year that starts in 2023 and ends in 2024. It’s a way to keep track of the government’s budget and spending over a year.
Subsidies -: Subsidies are financial help that the government gives to people or businesses to make things cheaper. For example, food and fertiliser subsidies make food and farming supplies cheaper for people.
Food Subsidies -: Food subsidies are money the government gives to make food cheaper for people. This helps ensure that everyone can afford to buy enough food.
Fertiliser Subsidies -: Fertiliser subsidies are money the government gives to make fertilisers cheaper for farmers. This helps farmers grow more crops at a lower cost.
Russia-Ukraine conflict -: The Russia-Ukraine conflict is a fight between two countries, Russia and Ukraine. It has caused problems for many people and has affected things like food and supplies around the world.
Pradhan Mantri Kisan SAMPADA Yojana -: The Pradhan Mantri Kisan SAMPADA Yojana is a government program in India. It helps farmers by providing money and support to improve their farming and food processing.
Balanced nutrient policies -: Balanced nutrient policies are rules that help farmers use the right amount of different nutrients in their soil. This helps grow healthy crops without using too many chemicals.
Drone demonstrations -: Drone demonstrations are events where people show how drones can be used. In farming, drones can help by spreading fertilisers and pesticides more evenly over crops.