A road to economic revival runs through
agriculture (The Hindu)
Mains Paper 3: Economy
Prelims level: Deindustrialisation 2.0
Mains level: Boosting agricultural reforms
- India is now facing sluggish growth, with the Reserve Bank of India
sharply cutting GDP growth forecast to 6.1% for 2019-20, which is lowest in
last six years; there has been a sharp decline in the performance of key
- The conventional approach of fiscal and monetary stimulus options to
address the relics of a slow pace would only give immediate relief and not
an enduring solution.
- Hence key policy measures as they exist now must reach out to emancipate
that which is dragging growth while stimulating key sectors.
Effect on primary sectors
- The ripples of the slowdown are gradually moving to the primary sectors
which is already reeling under an unprecedented confluence of pressure.
- Real agricultural and allied gross value added (GVA) grew by 2.9% during
2011-12 to 2017-18, while in the National Agricultural Policy (2000), it
should have been around 4%, to attain an overall economic growth of 8%.
- A highly skewed and unprecedented monsoon, erratic rainfall, and extreme
natural events are creating havoc as far as farms and farmers are concerned
which in turn are likely to disrupt supply chains, fuel inflation and have a
negative impact on consumption, all of which can further dampen the
prospects of revival of the economy.
- In addition, the current growth rate in the farm sector is less than
adequate to take on developmental challenges originating from the
Sustainable Development Goals, mainly zero hunger, no poverty, life on land,
and gender equality.
- Hence any key reforms packages in improving the economy should also take
cognisance of the crisis in the agricultural sector.
Push with the primary sector
- There is a great need to accept the role of agriculture in invigorating
crucial economic segments.
- The sector is a potential enabler and employer for more than 50% of the
population; it also has the potential to revive “animal spirits” by ensuring
farm viability: increasing the ratio of farm to non-farm income to 70:30 by
2022-23 from the present 60:40. According to the agriculture census 2015-16,
the real income of farmers doubled in almost 20 years from 1993-94 to
- As the target to double farmers’ income by 2022 is nearing, there must
be fast-lane options and swift actions to ensure curated reforms on land,
market, price, and ameliorate supply side constraints.
- As reiterated in the past, the Agricultural Developmental Council (ADC)
in line with the GST Council is a dire need to make agricultural reforms
more expressive and representative.
- For better income distribution, there is also a need to revisit regional
crop planning and the agro-climatic zone model at the highest possible level
so as to make agriculture the engine of sustainable economic growth in India
2.0 by 2022.
- There is a strong case to believe that deindustrialisation 2.0 and
creative destruction is under way from the decreasing growth rate, and that
slowly fading reform to stimulate the traditional sectors is adding to
unemployment and job loss.
- There is immense need to promote occupations which are less influenced
by the slowdown such as farming, handloom, handicrafts and others.
Investment and jobs
- In the Economic Survey 2018-19, the working age population will continue
to rise through 2041.
- Therefore, there is urgent need to increase the job-to-investment ratio
which is currently very low.
- Some estimates say that ₹1 crore investment in India can create only
four formal jobs.
- What has been less noticed and assessed in any survey is that
inter-State migration has a huge impact on personal consumption expenditure.
- Giving a policy nudge to in-situ employment creation is a must for a
stable income and spending.
- Also, there must be efforts to have an accurate picture of unemployment
data in order to have policy that is closer to facts.
- There is a need to reconsider the few distorting reforms that are often
stated to revive the short-term chaos in the long run.
- The sweet spot created by low oil prices in the past is slowly taking
its turn to hit the economy to further cut down aggregate demand.
- The occasional dip in growth due to various reasons will slow the pace
to achieving a $5-trillion economy by 2024.
- This is the right time to execute a slew of doable agricultural reforms
as the role of agriculture in reversing the slowdown is immense in the light
of its nearly 20% contribution to a $5-trillion economy.
- Therefore, a blend of efforts from a range of sectors, agriculture and
allied sectors is warranted to enable overall growth.
Q.1) Consider the following statements regarding Dead Zones:
1. Dead Zones or Hypoxia are areas in the ocean of very high Salinity in
which animal life suffocates and dies.
2. Recently, scientists have found a huge dead zone in Bay of Bengal.
Which of the statements given above is /are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.1) The current growth slowdown is an ideal time to implement doable
agricultural reforms. Comment.