Union Minister Nirmala Sitharaman | Photo Credit: ANI

Finance Minister Nirmala Sitharaman categorically stated that the Centre is not seizing State powers over agricultural bonuses. The Finance Ministry, in the meantime, clarified that the Expenditure Department’s recent letter regarding the alignment of bonus policies with national interests serves as a non-binding advisory meant to streamline State policies with national goals.

In a social media post, Finance Minister Nirmala Sitharaman dismissed Tamil Nadu Chief Minister M.K. Stalin’s allegations -- that the Union Government ordered the State to stop paddy cultivation incentives -- as “factually baseless, politically motivated and a deliberate distortion” intended to mislead local farmers.

The FM was reacting to Tamil Nadu CM’s allegation about the Centre has asked the States to reconsider providing incentives to the farmers. “I have shocking news to share with you. Just as I returned to Chennai after campaigning in Srikazhi, Cuddalore and Villupuram, officials showed me the letter asking us to reconsider providing the incentive [given over and above the Minimum Support Price fixed by the Centre]. Can anyone even think of this? The letter has come from the Finance Ministry headed by Nirmala Sitharaman, who claims to be from Tamil Nadu. Will AIADMK general secretary Edappadi K. Palaniswami come forward to condemn the BJP at least for this?” Stalin asked, while campaigning in support of the Secular Progressive Alliance candidates in Thanjavur district on Friday.

The communication in question is a letter by the Expenditure Secretary, dated January 1, 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 a directive,” the Finance Ministry said in a statement.

Adding to this, Sitharaman said that Centre’s suggestion to States was rooted in a positive, forward-looking vision for encouraging crop diversification and attaining self-sufficiency in crops such as pulses, oilseeds, etc so that farmers can tap into better price realisation by cultivating crops where domestic demand far outstrips supply. The declaration of a bonus over and above the Minimum Support Price (MSP) has been, and remains, entirely the prerogative of State Governments. “No one has taken that power away,” she said.

Meanwhile, the Ministry said that Centre is encouraging greater crop diversification in the national interest. “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,” the Ministry said, while adding that States and farmers across India have a long and rich tradition of cultivating pulses and oilseeds, and this letter aims to capitalise on this strength.

The Ministry highlighted that Centre 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 per cent in 2015–16 to 56.25 per cent 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.

It said that Centre’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,” the Ministry said.

Published on April 12, 2026