Trends, dynamics and policy implications of fertilizer and foodgrain subsidies in India

India’s fertilizer and foodgrain subsidies constitute a major and persistent component of central government expenditure, shaping both fiscal consolidation and development priorities. While numerous studies have described their magnitude, limited integrated empirical evidence exists on how successive policy interventions have influenced long-term subsidy trajectories and macro-fiscal patterns. This study addresses that gap through an ex-post assessment of fertilizer and food subsidies in India from 1976 to 2025. The analysis investigates (i) the temporal evolution of subsidy volumes and composition, (ii) the association of key interventions, the Nutrient-Based Subsidy (NBS, 2010), the National Food Security Act (NFSA, 2013), and the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY, 2020) with changes in subsidy trends, and (iii) their fiscal implications for expenditure shares and budgetary balance. The study employs a comprehensive data compilation framework drawing from multiple official sources, including Government of India ministry publications, parliamentary documents, and the licensed Indiastat database, with cross-verification across overlapping time series to ensure consistency. Using descriptive trend and compositional analyses, along with fiscal-ratio metrics and segmented regression models, the results suggest that NBS and NFSA did not show any clear changes in subsidy trends, while PMGKAY led to a short-term but notable fiscal expansion in 2020, raising total agricultural subsidies to 24.9% of total expenditure and 4.6% of GDP. Although partial rollback occurred post-pandemic, subsidy levels remained structurally high, averaging 12.2% of the budget in 2022 and coinciding with stagnation in health, education, and rural development shares. These findings illustrate the persistence and fiscal rigidity of India’s subsidy regime and provide empirically grounded insights for future rationalisation and targeting reforms.