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Effective Aggregate Support to Indian Agriculture

Mukherjee, Atri and D., Suganthi and Kumar, Rishabh and Bajaj, Priyanka (2023): Effective Aggregate Support to Indian Agriculture.

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To assess the aggregate level of public policy support to Indian agriculture, this paper puts together different support measures extended by central and state governments and classifies those under three categories, namely, subsidies, public investment and green box support. The aggregate support, combining all three components, remains sizeable at about 22.4 per cent of agriculture gross value added (agri-GVA) in 2020-21. There is a distinct shift in the composition, away from input subsidies and in favour of green box support, which includes direct transfer to supplement farmers' income. The effective aggregate support index constructed after assigning different weights to the three components as per their impact on agricultural growth highlights the need for greater public-sector investment to enhance the effectiveness of aggregate support for the farm sector.

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