Centre Plans Rs 50,000-Crore Scheme to Encourage States to Adopt Agricultural Reforms
Nearly three years after repealing its controversial farm laws, the Union government is contemplating a new Rs 50,000-crore scheme to incentivize states to adopt agricultural reforms. This initiative aims to support reforms in agriculture marketing, contract farming, and land leasing, according to sources familiar with the matter.
The proposal, presented by NITI Aayog officials to the Prime Minister’s Office following the NDA’s third consecutive Lok Sabha election win, is part of a broader effort to identify regulatory and institutional reforms in the agriculture sector during India’s ‘Amrit Kaal’—a 25-year period from 2022 to 2047.
The scheme revives an idea initially suggested by the 15th Finance Commission in its 2020-21 report, which recommended performance-based incentives for states implementing agricultural reforms. These reforms included the Model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, the Model Agricultural Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, and the Model Agricultural Land Leasing Act.
The 15th Finance Commission had emphasized that these reforms were essential for liberalizing agricultural markets, promoting competition, and attracting organized private sector investment to spur growth in the agriculture sector. Although the Commission’s initial proposal was broadened following the enactment of the three farm laws in 2020, it continued to stress the importance of the Model Agricultural Land Leasing Act.
In its 2021-26 report, the Commission selected four areas for performance-based incentives: land lease reforms, sustainable and efficient water use in agriculture, export promotion, and contribution towards Atmanirbhar Bharat. It recommended allocating Rs 45,000 crore for these incentives during the award period.
While the government had accepted many of the Commission’s recommendations, it had yet to fully implement grants for state-specific agricultural reforms. The Department of Economic Affairs noted that the government would consider these sectors when formulating and implementing new and existing Centrally Sponsored and Central Sector Schemes.
The new Rs 50,000-crore scheme, once finalized and approved, will provide central funding to states committed to implementing these key agricultural reforms, aiming to boost growth and efficiency in India’s agriculture sector.
(With inputs from agency)
Share your news, articles, deals, columns, or press releases with us! Click the link to submit and join our platform today.
