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Indian economy has transformed into a vibrant, rapidly growing consumer market with increasing purchasing power. However, the slow growth of agriculture is a serious concern for policy makers as two-thirds of the country's population depend on rural employment for their livelihood.
Reversing the prolonged slowdown in the sector is essential for our goal of inclusive growth for ensuring that growth benefits all sections of society and all regions of the country.
Govinda Junghare, a farmer from Maharashtra committed suicide because he could not escape the greedy moneylenders who were exploiting him and his family. The story is not unusual. The Govinda episode indicates the miserable life of the peasantry. More than 150,000 helpless farmers, all over the country, have committed suicide as the last resort, in the last decade and a half. This gloomy picture indicates the emerging crisis in the agrarian economy. Studies indicate that this tragic end of farmers' lives is driven by a threefold crisis. These include trade liberalization and globalization policies, deregulation of inputs, imports and prices and of course, the inevitable consequence of deepening debt.
The contribution of agriculture to the GDP has declined from 38% in 1975 to almost 20% this year. Nearly, 60% of the population depends on it for their livelihood. Investment in agriculture has been declining over the years, steadily. Successive governments have been reducing expenditure on rural development. Besides, the overall land under food grain cultivation has remained static at 120 million hectares and it is dropping steadily. Amidst stagnant yield, shortage of water, un-remunerative prices, the sector is neither economically nor environmentally sustainable. The yields for many agricultural commodities are low. A poorly maintained irrigation system and almost universal lack of good extension services are among the factors responsible for such conditions. The access to markets is hampered by poor roads, rudimentary market infrastructure and excessive regulation over the years. These sore realities further worsen the emerging crisis situation in agriculture.
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