ABSTRACT
Agricultural policy is a set of government decisions and actions relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets. Subsidy, the most powerful mechanism, can balance the growth rate of production and trade in various sectors and regions and for an equitable distribution of income for the protection of weaker sections of society [7]. The value of sector wise estimated major subsidies in India were about 231,083,0 million-Rs. for the year 2013-2014. The cost of India’s agricultural input subsidies as a share of agriculture output almost doubled from 6.0% in 2003-2004 to 11.6% in 2009-2010, driven mostly by large increases in the subsidies to fertilizer and electricity.
