Faced with a second drought in just four years, the government has taken steps to cut irrigation costs and increase fodder supplies for livestock farmers but kept from imposing any curb on exports of agricultural products or a ban of futures trading in them.
India's June-September monsoon rains, the main source of irrigation for 55 per cent of its farmlands, have so far been 19 per cent deficient, triggering fears of lower output and higher food inflation in one of the world's largest consumers and producers of grain.
Agriculture minister Sharad Pawar said the government would cut the cost of diesel used to power water pumps on farms by half, in areas where rains had been 50 per cent below average up to 15 July. The subsidy would continue until the end of the season.
Pawar was speaking after he chaired a ministerial meeting on drought, as power cuts - partly blamed for high demand from farm irrigation-hit north India for the second day running.
Pawar said all regions having 50 per cent deficient rainfall would qualify for diesel subsidy which would be borne by both state and central governments on 50:50 basis.
Increased diesel demand, which is also used for back-up power generation, has added to pressure on prime minister Manmohan Singh defer widely anticipated fuel price rises, making budget targets harder to achieve.