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Agriculture Is Redefining India's Economic Growth
Central government's thrust to Indian food industry has unveiled its immense potential that may catapult its growth to double digit in next ten years
Photo Credit : Shutterstock
The agriculture and allied sectors have contributed to 17.3 per cent to India's Gross Value Added in last five years and the country has witnessed a stupendous growth in food grains' production since Narendra Modi led BJP government came to power.
The records available with Ministry of Agriculture states that India produced record 278.38 Million tonnes of food grains in year 2017. The advanced estimates available with the Agriculture department suggested that the yield of rice reached 2.39 tonnes/hectare while wheat yield touched 2.4 tonnes/hectare in the country, highest among the developing economies.
Backed by decent monsoon India's food grain production increased by 8.7 per cent. Every grain be it rice, pulses or wheat; had a bumper yield last year. Timely upliftment and payment for the crop by the Central government and its agencies further propelled the confidence of the peasants to sky high.
Prime Minister Narendra Modi's flagship scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY) also gave confidence to the agriculturists that the current regime cares for them and it will ensure that farmers should not suffer because of government policies. The central government agencies insured 19 million hectares of agriculture land from the total 64.5 million hectares in the country.
The net insurance amount for insurance of Rabi crops is around Rs 671.96 Crores. The scheme has brought a paradigm shift in the approach of policy makers who have been dealing with the agriculture and allied sectors for years.
India's 59 per cent population relies on agriculture and allied sectors for their principal means of livelihood. When country's overall GDP is expected to grow at 7.1 percent in the current fiscal, the agriculture GDP may cross 4.1 per cent touching Rs. 1.06 lakh crore.
Central government's thrust to Indian food industry has unveiled its immense potential that may catapult its growth to double digit in next ten years. India is increasing its contribution to world food trade every year. Currently the country is sixth largest food and grocery market in the world with retail contributing 70 per cent of the sales. Indian food processing industry makes 32 per cent of the global food market and is ranked fifth in term of consumption, production of food items and their export.
In fact, India is the world's largest producer of milk for the last two decades and contributes 19 per cent of the world's total milk production. The country is emerging as the export hub of instant coffee that has led to exports of 1,77,805 tonnes coffee between April-August 2017 as against 1,62,641 tonnes in the same period last year.
India has also topped the list of shrimp exporters in the world, as the value-added shrimp exports rose 130 per cent year-on-year basis to 23,400 tonnes in 2017.
The country is also the second largest fruit producer in the world. India's horticulture output, is estimated to be 287.3 million tonnes (MT) in 2016-17 after the first advance estimate.
Agricultural export makes 10 per cent of the country's net exports. Agriculture items are the fourth-largest exported principal commodities. India's exports of basmati rice may rise to Rs 22,000-22,500 Crore, with volume to around 4.09 MT in 2017-18. The paddy is likely to be backed by a rise in average realizations. The groundnut exports from India are expected to cross 7,00,000 tonnes primarily because of a bumper crop due to good monsoons.
India also happens to be the largest producer, consumer and exporter of spices and related products. Spices exports from India grew by 9 per cent in volume and 5 per cent in value year-on-year basis.
The Indian online food delivery industry grew by 150 per cent year-on-year basis. The Indian gourmet food market is currently valued at Rs 9000 Crore. Moreover it is growing at a rate of 20 per cent for past three years. India's organic food market is also expected to increase by three times by 2020.
The growth contours could have been achieved primarily because the Modi government's farmer friendly policies. In fact, the allocation of budget for rural, agricultural and allied sectors has been increased by 24 per cent to Rs 1.87 Lakh Crore.
A dedicated micro-irrigation fund that was set up by National Bank for Agriculture and Rural Development (NABARD) with a corpus of Rs 5,000 crore last year. The government plans to set up a dairy processing fund of Rs 8,000 crore over three years with initial corpus of Rs 2,000 crore.
The participation of women in Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) has increased to 55 per cent and allocation to the scheme has been increased to a record Rs 48,000 crore in year 2017-18.
Short-term crop loans up to three lakh rupees at subsidized interest rate of 7 per cent per annum would be provided to the farmers. An additional incentive of 3 per cent is provided to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 per cent.
All these policy measures reflect the sincerity of the central government and its will to double Indian farmer's income by 2022. Narendra Modi led BJP government is committed to bring back the golden days of the Indian farmers.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.