Give any three drawbacks in government policy of providing subsidies on agricultural inputs
Answers
Answer:
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cast and the supply of such commodities.
Subsidies in India have a long history. Subsidy on land revenue in case of natural calamities and loans to concessional terms has been a traditional feature of the Indian revenue system. In free India, subsidies were introduced in 1947 when the relief and rehabilitation finance for refugee settlement was heavily subsidised. Since then, subsidies have covered a wide spectrum of Indian economy.
Rationale of Subsidies:
The rationale of subsidising agricultural inputs is to be traced to the role that these subsidies play in stimulating development of any country through increased agricultural production, employment and investment. However, there are arguments advanced on both sides.