The Effect of Agricultural Subsidy on Fiscal Management in Haryana
Sushma1,
1 Research Scholar, Department of Economics, Maharshi Dayanand University, Rohtak-124001
Abstract:
Agricultural subsidy is considered very important for increasing agricultural production in an economy. Subsidy may be provided in many forms, including direct payments, loans, tax incentives, and price support. Agriculture subsidy is continuously increasing in Haryana. The power subsidy in agriculture sector has increased by around 20 percent from 2005 to 2019. A very large part of government expenditure is going towards agricultural subsidies. This study intends to examine the impact of agricultural subsidy on fiscal management in Haryana. Fiscal deficit, primary deficit and revenue deficit have increased due to increase in electricity subsidy. The study uses secondary data from annual reports of CAG finance reports of Haryana, Economic Survey, and Statistical Abstract of Haryana. Granger causality test has been used to find out the relationship between subsidy and fiscal deficit. The analysis suggests that in order to reduce the impact of agricultural subsidies on fiscal management, attention needs to be given only to the financially poor farmers. The system should be made transparent by the government. The power subsidy given to the farmers needs to be metered so that the magnitude of actual consumption and the subsidy can be estimated properly.
Keywords: Agriculture Subsidy, Power Subsidy, Fiscal Deficit, Revenue Deficit
JEL Classification: H2, H3, H6
DOI link – https://doi.org/10.69758/GIMRJ/2504I5VXIIIP0103
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