Fertilizer Subsidy Trends In India’s Evolving Revenue Expenditure: Patterns From The 2025-26 Economic Survey
DOI:
https://doi.org/10.66635/21k47p23Keywords:
Fertilizer subsidy, Revenue expenditure, Fiscal sustainability, Direct Benefit Transfer, Sustainable agricultureAbstract
This paper looks at the trends of fertilizer subsidies in India in the evolving framework of the central government revenue expenditure between FY22 and FY26. The article employs a descriptive research design, using a year-on-year growth, share analysis, and an examination of the expenditure composition, based on secondary data provided in the Economic Survey 202526 (especially Table II.4). The results indicate that the expenditure on fertilizer subsidies increased significantly at ₹2.51 lakh crore in FY23 compared to the levels of 1.54 lakh crore in FY22, primarily because of the world commodity price pressures, and then it stabilized at 1.68 lakh crore in FY26 Budget Estimates. The subsidies on fertilizers also rose to 47.3% of major subsidies in the year of crisis, which later stabilized at 44% and their portion of the total revenue expenditure fell to 4.3% in FY26. The paper notes that the fertilizer subsidies are a counter-cyclical fiscal policy instrument which increases with external shocks and decreases with fiscal normalization. It also links the subsidy policy to sustainable agricultural development, digital delivery systems and new opportunities to Agri-enterprises and innovation driven input systems. The paper has concluded that the design of subsidies, balanced use of nutrients and institutional innovation are critical in sustaining support to farmers and at the same time make fiscal sense.
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