[Answered] To plan its next economic leap, India must rationalize subsidies and invest in agri-R&D. Examine how these reforms can be integrated with environmental sustainability for a resilient and balanced growth model.

Introduction

India’s growth story since independence has been remarkable, yet structural challenges in agriculture persist. Rationalizing subsidies and investing in agri-R&D, aligned with environmental sustainability, is critical to achieve resilient and inclusive growth.

India’s Growth and Agriculture: Context

1. India is projected to become the fourth-largest economy ($4.19 trillion by 2025, IMF) and is already the third-largest in PPP terms ($17.6 trillion).
2. Agriculture, employing nearly 42% of India’s workforce (PLFS 2023), has achieved foodgrain production of 353.9 MMT in 2024–25, but growth is subsidy-driven rather than innovation-led.
3. Subsidies for food and fertilizers consume ₹3.71 lakh crore in FY26 budget (~1% of GDP), crowding out long-term productivity-enhancing investments.

Subsidy Rationalization: The Need and Impact

1. Current Issues: Food subsidy leakages: 20–25% do not reach intended beneficiaries (NITI Aayog, 2020). Fertilizer subsidy: promotes overuse of urea, soil degradation, and groundwater depletion. Example: Punjab and Haryana face soil salinity, falling water tables, and stubble burning, linked to distorted subsidy regimes.
2. Rationalization Measures:  Direct Benefit Transfer (DBT) for fertilizer subsidies (already piloted, needs scaling). Diversifying food subsidy to include nutrient-rich millets and pulses (aligned with International Year of Millets 2023). Linking subsidies with climate-smart practices like micro-irrigation, organic farming, and renewable-powered cold chains.

Investing in Agri-R&D: A Growth Driver

1. Current R&D Gap: India spends less than 0.6% of agri-GDP on R&D, compared to 2.8% in China (FAO). Public R&D dominates, but private investment is limited and risk-averse.
2. Benefits of Higher Agri-R&D: Productivity gains like each rupee in agri-R&D yields ₹11 in long-term returns (ICAR). Nutritional outcomes by biofortified crops (zinc-rich rice, iron-rich pearl millet) improve child and maternal health. Technology diffusion like AI-driven soil health monitoring, drones for precision agriculture, and blockchain-based supply chains.
3. Examples: China’s hybrid rice revolution lifted yields and ensured food self-sufficiency. Brazil’s EMBRAPA model shows how tropical agri-R&D, linked with global markets, transformed exports.

Integrating Environmental Sustainability

1. Agriculture contributes ~20% of India’s GHG emissions (MoEFCC), primarily from rice cultivation, livestock, and fertilizer use.
2. Reforms must address the food-energy-water nexus:

• Climate-smart crops (drought-tolerant, short-duration paddy, millets).
• Water efficiency via drip irrigation (coverage only ~18% of irrigated land, needs scaling).
• Renewable integration: solar pumps under PM-KUSUM reduce diesel reliance.
• Agroforestry and soil carbon management to meet India’s Net Zero 2070

Way Forward

1. Shift from input subsidies to output- and innovation-linked incentives.
2. Expand public–private R&D partnerships, leveraging startups in agri-tech (e.g., DeHaat, Ninjacart).
3. Build resilient value chains through cold storage, logistics, and farmer-producer organisations (FPOs).
4. Align with SDG 2 (Zero Hunger) and SDG 13 (Climate Action), ensuring growth with equity.

Conclusion

India’s next economic leap requires rebalancing subsidies toward innovation, investing in agri-R&D, and embedding sustainability into policy. Only then can growth be resilient, inclusive, and aligned with long-term environmental security.