The Narendra Modi government assumed power in 2014 with the promise of doubling farm income so that the rural economy could be revived as Indian villages house the majority of the country’s population. The Economic Survey focuses on the agriculture sector, describing it as “one area ripe for and in need of such a pan-India dialogue.”
“Agriculture and farmers matter for a nation. Most countries understand that. India is no exception. India subsidises its water, electricity and fertilisers. The former two are provided virtually free. Their incomes are not taxed,” it says.
The government offers them a minimum support price (MSP) for 23 selected commodities. Monthly cash support is offered to farmers through the PM-KISAN scheme. Indian governments – national and sub-national –write off their loans. So, governments in India spend enough resources to look after the farmers well.
Politics to be blamed
Yet, a case can be made that they can be served better with some re-orientation of existing and new policies, the report says.
“A panoply of policies – by national and sub-national governments — working at cross-purposes with each other is hurting farmers’ interests, destroying soil fertility, depleting groundwater, polluting rivers and the environment with nitrous oxide emissions, starving the crops of nutrients and undermining people’s health with a diet rich in sugar and carbohydrates rather than fibre and protein. “
The payoff will be immense if we untie the knots that bedevil farm sector policies. More than anything else, it will restore faith in the self-confidence and ability of the state to steer the nation to a better future, apart from delivering socio-economic benefits, it says.
A shift from the past
The report draws a comparison with earlier models of development policies in India. “Earlier development models featured economies migrating from farm beginnings to industrialisation to value-added services in their development journey. Technological advancements and geopolitics are challenging this conventional wisdom,” it says.
“Trade protectionism, resource-hoarding, excess capacity and dumping, onshoring production and the advent of AI are narrowing the scope for countries to squeeze out growth from manufacturing and services. That is forcing us to turn conventional wisdom on its head,” the Economic Survey report says.
Can the farm sector be the saviour?
A return to roots, as it were, in terms of farming practices and policy-making, can generate higher value addition from agriculture, boost farmers’ income, create opportunities for food processing and exports and make the farm sector both fashionable and productive for India’s urban youth, the Economic Survey says.
“When resolved, the problem areas mentioned above that the current policy configuration has created over the years can become sources of India’s strength and a model for the rest of the world — developing and developed,” the report says.
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Economic Survey 2024: Agriculture can be a growth engine if…
