Economics & Politics / Political / Rural India

Subsidies for Farm Mechanization

Agriculture is the means of livelihood for around two thirds of the work force of India. This makes it one of the most important
sectors of the economy. At the time of independence, the revenue from the agricultural sector was quite low compared to what it is today. The main reason for the increase in revenue is the increase in agricultural production that was brought about by the Green Revolution.

The Green Revolution of the 60’s-70’s was responsible for bringing additional area under cultivation, extending irrigation facilities, providing better quality seeds, improving techniques of farming and plant protection.

Over the years, agriculture has emerged as one of the top priorities of the Central and State Governments. Keeping this in mind,
various schemes have been launched to improve farm productivity and the standard of living of millions of farmers who work to feed the nation.

National Agriculture Policy National Agriculture Policy

In 2000, government announced first-ever National Agriculture Policy. The main aims of this policy are:

  • Actualize the vast untapped growth potential of Indian agriculture
  • Strengthen rural infrastructure to support faster agricultural development
  • Promote value addition, accelerate the growth of agro business
  • Create employment in rural areas
  • Secure a fair standard of living for all agriculturalists
  • Discourage migration to urban areas and face the challenges arising out of economic liberalization and globalization.

 Farm Mechanization

Farm Mechanization is a part of National agriculture Policy. The government promotes agricultural mechanization with the following goals in mind:

  • Agricultural mechanization should lead to a sustainable increase in yields and cropping intensity with the objective of meeting the planned rate of growth in agricultural production and maintaining it.
  • The income of agricultural workers should rise at a satisfactory rate so that the disparity between urban and rural incomes is
    contained. The agricultural worker should have his rightful opportunity to lead a dignified life.
  • The benefits of agricultural mechanization should apply to all types of farmers including small and marginal ones in different
    regions of the country, particularly rain fed areas.
  • Agricultural mechanization should create a worker friendly environment especially for women workers by lessening hard labor, health hazards and improve safety in production operations.
  • Agricultural mechanization should lead to a reduced cost of production of agricultural commodities. This should increase the income of farmers and impart a price advantage while competing for export contracts in the international market.

Government Sponsored Schemes for Agriculture

There are a number of Schemes sponsored by Central Govt.for Agriculture sector. These schemes are
implemented with the support of the State Government.

The central government has launched a total number of 125 schemes Central Govt. sponsored schemes for Farmers for the promotion of agriculture in the country. These schemes deal with the development, mechanization, storage, transport, insurance, marketing and use of new technologies for specific agricultural commodities. Departments of Agriculture at the State level is running these schemes sponsored by the Central Government funding, in addition to these there are also a number of specific schemes run by State Governments independently.

Macro Management Mode of Agriculture Macro-Management Scheme of Agriculture,

One of the key Govt. schemes currently implemented is Macro Management Scheme – this scheme aims at all round development in Agriculture through Work Plans prepared by States. These include:

1. Reflection of local needs/crop/regions specific/priorities etc.

2. Providing flexibility and autonomy to States

3. Optimum utilization of scarce financial resource

4. Maximization of returns 5. Removal of regional imbalances.

  • Benefits: Subsidy is available under the Scheme on various components including agriculture implements such as Tractor,
    Power Tiller, Power Thrashers, Sprinklers and Plant Protection Equipment’s. Subsidy is also available on certified quality seeds and IPM demonstrations. Subsidy per farmer or per activity should not exceed 25% of the cost or the present subsidy level approved under 27 identified schemes, whichever is lower
  • Funding  Pattern : The outlay of the Work Plan would be shared by the Centre and the States in the ratio of 90:10. In the case of North Eastern States, however, the entire expenditure will be borne by the Government of India. Central assistance for Work Plans will be in the ratio of 80% by Grants and 20% by Loans.
  • Beneficiaries:  All Farmers – SC/ST, OBC & Other Communities
  • Eligibility criteria:  All Categories of Farmers
  • How to Avail: Selection of beneficiaries to be done through recommendation of District Agriculture Officer.

Subsidies under Mechanization & Technology division

There are different divisions supporting the different aspects of the schemes. Under the mechanization component of the
Macro-Management Scheme of Agriculture, there is a provision of subsidy for promoting agricultural mechanization. This scheme is open to all the categories of farmers and the subsidy pattern is indicated below.

These schemes are executed by the State Governments and Union Territory Administrations and the manner in which the beneficiaries are selected is decided by them. The amount of funds released for implementation of this scheme to the State Governments and Union Territory Administrations varies from year to year depending upon the annual plan outlay.


Name of Implement/Machine Rate of subsidy Remarks



@25% of the cost limited to Rs.30,000/-

Tractors of upto35   PTO HP


Power Tiller

@25% of the cost limited to Rs.30,000/-

Power Tiller (8 BHP & above)


Self propelled reaper,
paddy transplanter and other similar self propelled machines

@25% of the cost limited to Rs.30,000/-


Specialized  power
driven  equipment such  Zero-till-Seed  Drill,
Raised  Bed Planter, Sugarcane
cutter planter, potato planter, potato Digger, groundnut digger, rotavator
straw reaper, strip till drill, tractor drawn reaper, cleaner-cum-grader,
dryer, stubble shaver, mobile fruit harvester, power weeder etc.

@25% of the cost limited to Rs.20,000/-


operated implements/tools

@25% of the cost limited to Rs.2,000/-


driven   implements

@25% of the cost limited to Rs.2,000/-


Animal driven tool

@25% of the cost limited to Rs.5,000/-


Power    driven

@25% of the cost limited to Rs.10,000/-


Threshers (All types)

@25% of the cost limited to Rs.10,000/-


Diesel/Electric pump

@25% of the cost limited to Rs.8,000/-



Sprinkler sets :

a)  @25% of    the cost limited to Rs.15,000/- per set
for small, marginal, SC&ST and women farmers.

b)  @25% of the cost limited to
Rs.10,000/- per set for other farmers upto 2 ha.


Drip Irrigation

@25% of the cost for small, marginal, SC&ST &  women farmers and 25% of the cost  for other farmers with the limit as under :

State SC/ST, S/M & Women,
a)fully developed* 22500/-
b)less developed ** 26000/-
c)Hilly region*** 28500/-


Protection Equipment:(i) Manual

@25% of the cost limited to Rs.800/

(ii) Power operated

@25% of the cost limited to Rs.2,000

(iii) Tractor mounted

25% of the cost limited to Rs.4,000/-

(iv) Aero- blast sprayer

25% of the cost limited to Rs.30,000/-

*    Fully developed  – Andhra Pradesh, Karnataka, Gujarat, Kerala, Mahashtra, Tamil Nadu.

**  Less developed    – Others, except those in Himalayan Region.

*** Hilly Region  –  North-Eastern Region and Himalayan Region (HP, J&K, Uttaranchal, Darjeeling).


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