17 January 2026: MAINS CURRENT AFFAIRS

MAINS Current Affairs includes Agricultural Subsidies and Need for Reform & China’s Declining Birthrate and Impacts

Agriculture

1. Agricultural Subsidies and Need for Reform

Context

The food subsidy is projected to reach ₹2.25 trillion, while the fertiliser subsidy may rise to ₹2 trillion, out of a total budget of about ₹51 trillion.

Together, these constitute 8–8.5% of the Union Budget, yet both operate at sub-optimal levels.

Agricultural Subsidies in India

Agricultural subsidies are financial support and incentives provided by the government to reduce farmers’ production costs, stabilise incomes, ensure food security, and promote adoption of modern and sustainable practices.

Price Support

The government sets Minimum Support Prices (MSPs) for 25 crops.
MSP acts as a guaranteed floor price—if market prices fall, the government procures at MSP.
Introduced in 1965, MSPs cover major staples (rice, wheat, maize), pulses, oilseeds, and select commercial crops like cotton.

Input Subsidies

Government subsidises key agricultural inputs such as fertilisers, electricity, irrigation, seeds, credit, and crop insurance.
These reduce production costs and encourage technology adoption.

Importance of Subsidies in Indian Agriculture

Ensures Food Security

Lowers production costs and maintains stable foodgrain supply for a large population.
Supports Small & Marginal Farmers
Helps farmers with low income and limited risk capacity withstand price shocks and input costs.
Stabilises Farm Incomes
MSP and income support schemes (e.g., PM-KISAN) act as safety nets against market volatility and crop failures.

Promotes Productivity & Technology Use

Subsidised inputs encourage adoption of high-yielding seeds, fertilisers, irrigation, and mechanisation.

Sustains Rural Livelihoods

Keeps agriculture viable, supports allied sectors, and reduces distress migration.

Arguments Against Subsidies

Heavy Fiscal Burden

Large subsidies on food, fertiliser, and power strain government finances and reduce funds for infrastructure and R&D.

Inequitable Distribution

Benefits often accrue to large farmers, while small farmers receive limited gains.

Environmental Damage

Cheap fertilisers, free power, and underpriced water cause soil degradation, over-extraction of groundwater, and ecological stress.

Distorted Cropping Patterns

MSP-linked incentives promote water-intensive crops like rice and sugarcane in unsuitable regions.

Market Inefficiencies

Weakens market signals, reduces crop diversification, and limits responsiveness to demand.

Barrier to Reforms

Dependence on subsidies discourages structural reforms, private investment, and climate-smart agriculture.

Way Ahead

Shift from Input-Based to Income-Based Support

Move towards direct income support (DBT) to reduce waste and improve farmer flexibility.
Reform Price Support & Procurement
Decentralise procurement, diversify MSP beyond rice and wheat, and strengthen market-based mechanisms like e-NAM and FPOs.

Committee Recommendations

Major committees—Shanta Kumar Committee, Kelkar Committee, NITI Aayog, and Economic Survey—stress the need for:

Rationalising agricultural subsidies
Shifting to targeted DBT, income support
Linking subsidies to efficiency, sustainability, and fiscal prudence

Economy

2. China’s Declining Birthrate and Impacts

In News

China’s population has been continuously declining since 2022, raising concerns over long-term demographic and economic sustainability.

Status of China’s Population

China’s population declined for the fourth consecutive year in 2025, falling by 3.39 million to 1.405 billion.
Births declined sharply to 7.92 million in 2025, a 17% drop from 9.54 million in 2024.
Crude Birth Rate (CBR) fell to 5.63 per 1,000 people, the lowest in decades.
Deaths rose to 11.31 million, accelerating population contraction.
According to the UN, China’s population may decline from 1.4 billion to about 1.3 billion by 2050, with nearly 40% of the population aged above 60, fuelling fears that China may age before becoming rich.

Steps Taken to Increase Population

One-child policy ended in 2016, followed by a two-child policy, and later a three-child policy in 2021, but without success.
Government measures include:
- Financial incentives for parents
- Lower childcare and education costs
- Raising retirement age
- Campaigns encouraging marriage and childbirth
Policy adjustments include higher age limits for civil service exams and steps to protect pension funds.
Despite these, challenges persist due to high living costs, unemployment, healthcare expenses, gender imbalance, and lingering social impacts of the one-child policy.

Impacts of Declining Birthrate

Economic Growth

Shrinking workforce threatens manufacturing competitiveness, productivity, and innovation.

Ageing Population

Rising old-age dependency ratio places stress on pensions, healthcare, and social security systems.

Social Pressures

High costs of child-rearing, urban housing, and education discourage family formation.

Policy Limitations

Government incentives such as tax breaks and housing subsidies have had limited impact on fertility revival.

India’s Birthrate and Fertility Trends

Infant Mortality Rate (IMR): Declined from 39 (2014) to 27 (2021) per 1,000 live births.
Neonatal Mortality Rate (NMR): Reduced from 26 (2014) to 19 (2021).
Under-Five Mortality Rate (U5MR): Fell from 45 (2014) to 31 (2021).
Sex Ratio at Birth: Improved from 899 (2014) to 913 (2021).
Total Fertility Rate (TFR): Stabilised at 2.0 in 2021, down from 2.3 in 2014, nearing replacement level.

How China’s Demographic Slowdown Creates Opportunities for India

India’s younger workforce can attract labour-intensive industries relocating from China.
Rising wages and labour shortages in China may push global firms towards India.
India may benefit from increased global demand for goods and services.
Stable fertility ensures a large working-age population, supporting long-term growth.
India’s emphasis on SDG 2030 goals strengthens sustainable population health and inclusive development.

Conclusion and Way Ahead

China’s declining birthrate is reshaping its economic and social landscape with global repercussions.
For India, this demographic shift offers a strategic opportunity to leverage its young population in manufacturing, trade, and human capital.
India’s near-replacement fertility rate can become a long-term advantage if supported by investments in education, healthcare, skilling, and job creation.