Think tank endorses direct fertiliser transfers, flags AgriStack concerns

The Indian Council for Research on International Economic Relations has released research supporting a shift towards direct cash transfers as an alternative to the current fertiliser subsidy system, arguing the approach could enhance resource allocation and reduce fiscal strain. The papers contend that replacing the existing framework with targeted transfers to farmers would create a more efficient mechanism for agricultural support while potentially lowering the government's budgetary burden.

However, the think tank has simultaneously raised concerns about the expanded rollout of AgriStack, the government's integrated agricultural data platform. Researchers warn that policymakers should exercise caution in implementing the system, citing unspecified risks associated with centralised agricultural data collection and usage.

A key finding in the ICRIER analysis reveals significant regional imbalances in how central agricultural support is distributed. Punjab and Haryana receive substantially larger volumes of government funding relative to their agricultural output compared with most other states, suggesting the subsidy structure may not align optimal resource allocation with productive capacity across India.

The research comes as policymakers continue evaluating mechanisms to streamline agricultural expenditure while maintaining farmer welfare. Direct transfer schemes have gained traction internationally as alternatives to commodity-based subsidies, though implementation challenges remain in the Indian context given the diversity of farm holdings and regional agricultural practices.