THE GIST of Editorial for UPSC Exams : 31 December 2019 (An Overview of Agro Based Industries in India (Indian Express))

An Overview of Agro Based Industries in India (Indian Express)

  • Mains Paper 3: Economy 
  • Prelims level: Agro-based Industry
  • Mains level: Overview of Agro-based Industry


  • India’s 54.6 per cent population is still engaged in agriculture and allied activities. Low income from the primary farm produce and lack of investment in the processing and agri – value chain has caused rapid reduction in farm profits and the farm occupation has now come under severe pressure.
  • Agro-based Industry:
  • Agro-industry encompasses not only the activities that utilize raw materials sourced from agriculture, but also those provide input for modern agronomic practices.
  • Based on the input-output linkages and the interdependence between agriculture and industry, agroindustries can be of two types- (a) processing industries or agro-based industries and (b) input supply industries or agro-industries.

Why Promote Agro-Based Industries? 

  • India has the world’s 10th largest arable land, 20 agro-climatic regions and 15 major climates. The harvest and post-harvest losses for agriculture commodities are very high.
  • The total estimated economic value of quantitative loss was found to be Rs. 92651 crore at average annual prices of 2014.
  • There is opportunity of an overall growth of agricultural economy as only 2 to 3 percent of agri-commodities are processed.

Government Initiatives:

(a) Food Processing and Beverages:

  • The Ministry of Food Processing Industries implements various Central Sector Scheme to boost food-processing industries. It has recently re-structured its schemes under the new Central Sector Scheme – Pradhan Mantri Kisan Sampada Yojna (PMKSY).
  • The scheme components include setting up of (a) Mega Park (b) Integrated Cold Chain and Value Addition Infrastructure (c) Food Safety and Quality Assurance Infrastructure (d) Human Resources Development and Institution.

(b) Textiles Industries:

  • The Government has rolled out a number of initiatives. These include:
  • Scheme for Integrated Textiles Park, Integrated Processing Development Scheme, Group Workshed Scheme, Common Facility Centre and Amended Technology Up-gradation Fund Scheme, Scheme for the Development of the power loom Sector (Power Tex),
  • SAMARTH – The Scheme for Capacity Building in Textiles Sector (SCBTS), Comprehensive Handloom Cluster Development Scheme (CHCDS, Rebate of State and Centre Taxes and Levies (ROSCTL) etc.

(c) Jute Industry:

  • The Govt. has attempting to modernize the jute mills by increasing their productivity and bringing in modern technology and equipment.
  • National Jute Board’s Schematic interventions, providing capital subsidy to jute mills to address their issues and challenges at hand.

(d) Khadi and Village Industry:

  • Ministry of MSME’s Khadi and Village Industries Commission (KVIC) promotes setting up of various post-harvest agro and food based micro industries like processing of pulse, cereals etc.
  • Through Prime Minister’s Employment Generation Programme (PMEGP), KVIC tries to generate self-employment opportunities.


  • The inherent advantages of agri-industries are optimal utilization of local agri-resources, mobilization of investment on a large scale, creation of job opportunity, prevention of distress rural-urban migration and reduction of disparity across sectors and regions.
  • Agri-based industries confirm to the notion of competitive advantage both within and outside the country. They can play a role of a safety valve to absorb surplus rural labour and can address the problem of large scale unemployment/disguised employment in rural areas.
  • The challenge here is how effectively the government implements its schemes and policy
  • interventions so as to ensure an all – round industrial growth in rural areas without undermining the identity of village, its socio – economic structure, agri-production systems and the basic agri-manufacturing characteristics.

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Prelims Questions: 

Q.1) With reference to the Hybrid-Annuity Model (HAM), consider the following statements:
1. It is a mix of engineering, procurement, construction, and build-operate-transfer.
2. Under this model, the government will release 90% of the total project cost during construction, to be paid to the concessionaire in tranches linked to completion milestones.
Which of the statements given above are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above

Ans: A
Mains Questions:

Q.1) Describe the initiatives taken by the government towards promoting Agro-Based Industries. Why Promote Agro-Based Industries is needed?