Agricultural subsidies help the farmers to increase their welfare and increase production of various crops. There is an indirect link between the micro irrigation subsidies and the natural resources. The micro irrigation subsidies to the farmers increase the yield as well as reduce the water usage for various crops. This study analyzes the impact of micro irrigation subsidies on natural resources and environment. The results revealed that the yield of coconut, tomato, onion and maize was increased by 50 per cent, 26 per cent, 43 per cent and 36 per cent respectively also the of the percentage of water saved in maize, tomato and onion is around 25 per cent, 34 per cent and 32 per cent respectively. Thus this study shows the impact of micro irrigation subsidies in natural resources and environment.