Fertilizer subsidy in India: who are the beneficiaries
Abstract
There is a general view in academic and policy circles
that fertiliser subsidies are concentrated geographically
on a relatively small number of crops and producers. In
many cases they do not reach the targeted group(s). This
paper examines the trends in fertiliser subsidy and issues
of equity in its distribution between farmers and the
industry, across regions/states, crops and different farm
sizes. The study shows that fertiliser subsidy is more
concentrated in a few states and interstate disparity in its
distribution is still high though it has declined over the
years. A fair degree of equity exists in the distribution of
fertiliser subsidy among farm sizes. Based on the results,
this paper justifies fertiliser subsidies and questions the
rationale for a direct transfer of subsidy to farmers.
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