Agri Subsidy and Need for Reform:
In the 2026 Union Budget cycle focus on rationalizing food and fertilizer subsidies—which account for roughly 8.5% of the total budget—by potentially merging them into an augmented PM-Kisan scheme.Agricultural subsidies are financial aids provided by the government to farmers to reduce input costs (fertilizers, power, seeds) or ensure price stability (MSP).Reform is needed because the current “blanket” approach leads to environmental degradation, soil toxicity from urea overuse, and skewed crop choices that favor cereals over nutritious pulses and oilseeds.For FY 2025-26, the combined food and fertilizer subsidy is pegged at approximately ₹3.71 lakh crore.Expected to touch ₹2.03 lakh crore, covering nearly 56% of the population (813 million people).Allocated at ₹1.67 lakh crore, making it the second-largest subsidy component in the Union budget. MSP payouts have more than tripled over the last decade, reaching ₹3.33 lakh crore by June 2025. India’s import dependency for raw materials like potash and phosphate remains high at 90% and 60% respectively, driving up the subsidy burden.
