agriculture subsidy

1. Table of
Contents
 How Government of India is giving agriculture subsidiary to farmers and what
are the pain points/challenges faced by govt. of India.
 Briefly describe how cross-country payment takes place in India and what are
the pain points/challenges of cross-country payment?
1

2. Types of
Agriculture
Subsidy in India
Fertilizer
subsidy
Power
subsidy
Agricultural
Equipment
subsidy
Irrigation
subsidy
Seed subsidy Export
subsidy
Credit
subsidy
Agricultural
infrastructure
subsidy
2

3. Direct Benefit
Transfer for
Non-Agri
Subsidies
3

4. Direct Benefit
Transfer for
Agri Schemes
4

5. Expenditure on
Major
Agricultural
Subsidies
(Rs. Crores)
5

6. Challenges in
Farm Subsidies
 Lack of Financial Inclusion in rural areas, poor accessibility of
ATM and banking service.
• The chance that farmers can use the money for non-farm unproductive needs.
• More money in the hands of the public may lead to inflation.
• May have an impact on the food security of the country.
• Main issues like market reforms and innovation in agriculture remained unaddressed.
• Issues with the identification of beneficiaries.
• Subsidies like MSP has led to cereal centric agriculture with distorted
cropping patterns.
 Providing subsidies in power, irrigation, and fertilizer subsidies have led to over
usage of natural resources resulting in desertification. Ex: Punjab's groundwater
resources note that groundwater extraction has increased from 149% in 2013 to 165%
in 2018.
 Indirect subsidies are marred with corruption and leakages, due
to intermediataries. Ex: PDS where the presence of ghost beneficiaries, leakages
are observed.
 Pressure from the international community to reduce subsidies as per WTO
subsidies that distort the market come under the Amber box.
 Vote bank politics, the government in power can provide subsidies
for mear political mileage.
6

7. Cross-Country
Payment
7

8. What is Cross-
Country
Payment?
 What are Cross Border/Country Payments?
Cross-border payments are transactions where the payee and the transaction
recipient are based in separate countries.
The cross-border payments industry now utilizes many payment modes like
credit cards, cross-border payment gateways, wire transfers, e-wallet,
distributed ledger technology, APIs, etc., every day to facilitate international
payments.
 The different types of cross border transactions:
1. Consumer to consumer cross border transactions – P2P transfers
2. Consumer to Corporate: Ecommerce, Subscription, Collection
3. Corporate to Consumer: Insurance, Payroll, refunds, dividends
4. Corporate to Corporate: Supplier/ trade payments.
8

9. Methods of
Cross-Border
Transfer
9