Date: 2026-04-12Category: Press ReleaseState: Union GovernmentCountry: India
Department of Expenditure had issued a D.O. letter to Chief Secretaries of States, as an advisory to states and not a directive, to align their bonus policy to promote pulses, oilseeds and millets, in line with the national priorities for nutritional security, Aatmanirbharta (self-reliance) and sustainable agriculture
**Executive Summary**
The Department of Expenditure, Ministry of Finance, issued an advisory on January 9, 2026, to State Chief Secretaries regarding the alignment of crop bonus policies with national priorities. The communication encourages states to promote the cultivation of pulses, oilseeds, and millets to achieve nutritional security, sustainable agriculture, and self-reliance (*Aatmanirbharta*). This advisory aims to address environmental stress and import dependence caused by excessive state-level incentives for wheat and paddy.
**Key Points / Main Content**
**Policy Objectives and Nature**
* **Advisory Status:** The D.O. letter issued by the Department of Expenditure is a constructive advisory to states, not a mandatory directive or imposition.
* **Strategic Alignment:** States are encouraged to align their agricultural policies with national goals of food security and reduced reliance on imports.
* **Focus Crops:** Priority is placed on increasing the production of pulses, oilseeds, and millets over traditional monocultures.
**Concerns Regarding Existing State Bonuses**
* **Production Imbalance:** Additional state bonuses over the Minimum Support Price (MSP) for wheat and paddy lead to skewed production, particularly in Northern India.
* **Environmental Impact:** Intensive cultivation of wheat and paddy causes environmental stress due to high water and fertilizer requirements.
* **Economic Consequences:** Over-concentration on certain crops reduces the acreage of essential commodities, leading to higher import dependence for pulses and edible oils.
**Central Government Support and Schemes**
* **Financial and Technical Aid:** Support is provided through PM-KISAN (Rs 6,000 monetary support), Soil Health Cards (1.75 crore issued), and PM Fasal Bima Yojana.
* **Incentivizing Diversification:** The government has consistently increased MSP in favor of pulses and oilseeds and launched specific missions for oil palm and pulses.
* **Infrastructure Development:** The number of Mega Food Parks has increased to 41 (as of 2025) to strengthen post-harvest and processing capabilities.
* **Targeted Transformation:** The Prime Minister Dhan-Dhaanya Krishi Yojana is transforming 100 low-performing districts by facilitating credit and improving irrigation.
**Observed Progress**
* **Edible Oil Reliance:** Import dependence fell from 63.2% in 2015–16 to 56.25% in 2023–24.
* **Oilseed Growth:** Between 2014–15 and 2024–25, oilseed production increased by nearly 55%, with a 31% rise in productivity.
**Impact Analysis**
**State Governments**
**Impact**
States are requested to reconsider bonus policies that incentivize wheat and paddy at the expense of other essential crops.
**Action Required**
Align state agricultural and bonus policies with national priorities to promote crop diversification and sustainable practices.
**Farmers**
**Impact**
Farmers are encouraged to move away from monoculture toward more resilient and profitable crop patterns supported by central schemes and infrastructure.
**Action Required**
Utilize central resources such as Soil Health Cards, credit facilities, and MSP-backed procurement for pulses and oilseeds to improve long-term profitability.
**National Food Security Framework**
**Impact**
The nation moves toward reduced import volatility and improved nutritional security through a balanced agricultural output.
**Action Required**
Continued integration of research, seed dissemination, and value-chain development by the Central Government to support domestic production.
Key Entities Referenced
Department of Expenditure: The department within the Ministry of Finance that issued the advisory to states to align their bonus policies with national crop diversification priorities.
Minimum Support Price (MSP): The central government's crop support mechanism; the advisory discourages states from providing additional bonuses above MSP for wheat and paddy.
Prime Minister Dhan-Dhaanya Krishi Yojana: A scheme aimed at transforming low-performing agri-districts by enhancing productivity and promoting crop diversification.
National Mission on Edible Oils–Oilseeds: A central initiative to increase domestic production of oilseeds and reduce reliance on imported edible oils.
Mission for Aatmanirbharta in Pulses: A strategic mission aimed at achieving self-reliance in pulse production and ensuring national nutritional security.
Ministry of Finance
Department of Expenditure had issued a D.O.
letter to Chief Secretaries of States, as an
advisory to states and not a directive, to align
their bonus policy to promote pulses, oilseeds
and millets, in line with the national priorities for
nutritional security, Aatmanirbharta (self-reliance)
and sustainable agriculture
The Central Government’s communication to States reflects a
constructive & positive approach aimed at strengthening
India’s long-term food and crop security
Posted On: 12 APR 2026 6:10PM by PIB Delhi
Recently, Chief Minister of Tamil Nadu, in a speech, has referred to a letter issued by Department of
Expenditure, Ministry of Finance, with regard to the bonus provided by State Governments.
In this context, it is stated that the Secretary, Department of Expenditure, Ministry of Finance, had issued a
D.O. letter dated 09.01.2026 to the Chief Secretaries of States to align their bonus policy to promote
pulses, oilseeds and millets, in line with the national priorities for nutritional security, Aatmanirbharta
(self-reliance) and sustainable agriculture. The letter was an advisory to states and was not directive.
The communication to States reflects a constructive & positive approach aimed at strengthening India’s
long-term food and crop security:
1. The Government of India announces the Minimum Support Price (MSP) for various crops to
support farmers. However, in many states, especially in northern India, crop production remains
heavily skewed toward wheat and paddy. When State Governments announce an additional bonus
over and above MSP for these crops, it further encourages their cultivation, leading to reduced
acreage under pulses, oilseeds, and millets, greater environmental stress due to water- and fertilizer-
intensive farming, and higher import dependence for essential crops like pulses and edible oilseeds.
2. Thus, the Government of India has taken a responsible and forward-looking position by
encouraging greater crop diversification in the national interest. The larger objective is to
discourage monoculture of wheat in certain parts of Northern India and Paddy in several statesacross India. By encouraging States to work towards sustainable agricultural practices that protect
both farmers’ interests and national food security needs.
Expanding domestic production in pulses, edible oils, and oilseeds is essential not only for strategic and
economic reasons, but also for farmer welfare. Domestic production of Pulses, oilseeds, and edible oil
will reduce reliance on imports that are often exposed to international uncertainty, supply-chain
disruptions, and price volatility, while strengthening nutritional security and promoting a more balanced
and resilient crop pattern in the country.
3. States and farmers across India have a long and rich tradition of cultivating pulses and oilseeds, and
this letter aims to capitalize on this strength.
In a period when self-reliance in key food crops has become increasingly important, it is imperative that
the States and the Centre work towards making India self-reliant in pulses and oilseeds.
4. The Government of India has already taken several concrete steps to increase domestic
production of pulses, oilseeds and edible oils. These include the Mission for Aatmanirbharta in
Pulses, National Mission on Edible Oils–Oilseeds and National Mission on Edible Oils–Oil
Palm.
The government has also consistently aligned MSP increases in favour of pulses and oilseeds to encourage
farmers to shift away from over-concentration in a few crops. The Economic Survey 2025–26 also said
imported edible oil dependence had fallen from 63.2% in 2015–16 to 56.25% in 2023–24, showing
movement in the right direction. Between 2014–15 and 2024–25, the area under oilseeds increased by
over 18 per cent, production by nearly 55 per cent, and productivity by about 31 per cent.
5. The Government of India has taken various steps for the welfare of the farmers. Under PM-
KISAN, monetary support of Rs 6,000/- is provided to over 9 crore farmers. Over 1.75 crore Soil
Health Cards and 8,270+ testing labs ensure science-backed farming. PM Fasal Bima Yojana
shields 4 crore farmers from weather risks. The Prime Minister Dhan-Dhaanya Krishi Yojana is
transforming 100 low-performing Agri-districts by enhancing productivity, promoting crop
diversification, augmenting post-harvest storage, improving irrigation, and facilitating agricultural
credit, directly benefitting 1.7 crore farmers, ensuring that the most underserved farmers are reached
first. Mega Food Parks have jumped from just 2 in 2014 to 41 in 2025 — 24 operational and 17
under implementation — strengthening post-harvest and processing infrastructure.
Thus, Government of India’s approach integrates research, improved seed dissemination, MSP-backed
procurement support, processing infrastructure, and value-chain development to ensure farmer
profitability. By promoting crop diversification, the profitability of farmers will further increase.
The letter was written with the intent for States to align their agricultural policies with broader national
priorities and complement them. Alignment with such goals is not a burden on states; it is a shared
responsibility that serves farmers, consumers and the country as a whole.Any attempt to portray it as an imposition or to deliberately misread its purpose is a distortion of
the record.
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NB/KMN
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