Agricultural

After securing the lowest bids for 734,000 tonnes, the government plans to seek price matches from other qualified suppliers for the remaining quantity, allowing it to procure more urea at sharply lower rates.

This year’s war-driven subsidy overshoot could burn a huge hole in the government's budget. While easing or abandoning price controls may seem difficult, India’s policy status quo looks riskier by the day.

India may need a sharp hike in fertilizer subsidy to shield farmers from war-driven price spikes, with the department seeking a 100% increase in FY27. Even as subsidy and fuel support costs rise, the government is not planning any supplementary demands for grants, say people in the know.

Food subsidy, the largest component, stood at ₹1.92 trillion, or 85% of the revised estimate of ₹2.28 trillion. However, the urea subsidy has already breached its annual target, reaching ₹1.28 trillion, or 101% of the revised estimates, and higher than the ₹1.16 trillion recorded a year ago.

As the war in West Asia disrupts supply chains, India's fertilizer subsidy may exceed ₹2.17 trillion in FY27. This trend raises concerns about fiscal discipline and food inflation.

Field reports suggest that these short-duration crops, grown between rabi and kharif seasons, are largely holding up, supported by timely irrigation, said M.L. Jat, secretary, Department of Agricultural Research and Education, and director general, Indian Council of Agricultural Research (ICAR).

The 16th Finance Commission has echoed its predecessors in warning about the harsh fiscal fallout of unchecked freebies. But subsidies and cash transfers have a way of veering out of control. It’s a lesson that an emperor of olden times learnt a little too late.

Haryana, Uttar Pradesh, Rajasthan, Tamil Nadu and Andhra Pradesh plan to launch state-specific agroforestry policies to include tree-based farming as a driver of sustainable economic growth.

India’s apex court has done well to caution political parties against splurging on indiscriminate freebies. We can only guess what electoral gains such pre-poll declarations deliver, but they clearly strain public finances. Bad economics can eventually be bad politics too.