You are here: Home » Economy & Policy » News
Business Standard

World Bank asks India to cut 'unproductive' farm subsidy

Press Trust Of India  |  New Delhi 

Rural India, "the battleground in the fight against poverty," can be transformed by switching government expenditure from food, fertiliser and power subsidies to productive investment in farm infrastructure, World Bank economists have said.
"Besides being bad for the environment and a potential source for leakage of funds, these subsidies absorb an increasingly larger share of agricultural spending," World Bank Lead Rural Development Specialist Martien van Nieuwkoop and Lead Economist Dipak Dasgupta said in their paper on Indian agriculture.
They said the government expenditure must be shifted from these large and often unproductive subsidies to transforming rural infrastructure like roads, water supply, research, electrification and market support.
Based on various analytical works and project interventions, the World Bank economists, terming India's rural areas as "the battleground in the fight against poverty," said farmers must be involved "front-end" to deal with resistance to the transition for rationalisation of existing sops.
They said barriers to domestic marketing of agricultural produce must be removed and greater participation of the private sector in procurement be encouraged.
"This will entail a different role for the state, including the need for organising farmers so that they are better positioned to capture economies of scale in marketing and value addition," the paper said.
The World Bank complimented the government for the recent tribal rights legislation that has "opened the door to better community forestry management."
However, implementation, learning and community involvement is the key to achieving success, it said.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, April 02 2007. 00:00 IST
RECOMMENDED FOR YOU
.