Thursday, April 24, 2014

How India subsidizes cereal exports

Interesting article  by Ashok Gulati in the Economic Times where he points to the increasing cereal production in the country linked to higher production in states like MP and Chattisgarh, the easing of export curbs,and the increasing exports of cereals (mainly rice, wheat, corn). Gulati maintains that the exports are subsidized by the government as it subsidizes the inputs that are needed for cereal production - water, electricity and fertilizers.

Gulati would have the government target the subsidy while freeing up exports completely. But are cereal exports from India at all in public interest? Are there other ways in which the state can intervene to promote the right balance between cereal production and the production of other crops?

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