Agricultural Economy of India : Current Status & Issues

Agriculture occupies a key position in the Indian economy. Though agriculture has now shrunk as a proportion of gross domestic product (GDP) to around 13 percent, it is a vital sector and provider of livelihood for 2/3rd of Indias working population. Agriculture being a State subject, the bulk of public investment in agriculture takes place at the level of States and the Central Government supports the States as a catalyst. The nodal agency for development of agriculture in India is the Ministry of Agriculture and Farmers Welfare, Government of India. Agricultural policy followed since Independence in 1947 can be broadly classified into three phases. Phase one, immediately after Independence, witnessed several institutional changes through land reforms and initiation of major irrigation projects. The second phase, since the mid-1960s, was aimed at increasing agricultural productivity to attain self-sufficiency in foodgrains through technological revolution and Government support for credit, marketing, and extension services. This was followed by the current phase, since the late 1980s, aimed at making agriculture more market-oriented. Regrettably, Indian economy has been witnessing loss of dynamism in the agriculture and allied sectors in recent years. The sector, as a whole, has showed poor performance lately. Signs of agrarian distress are visible in parts of the country. The spate of suicides by farmers in some areas is the most disconcerting manifestation of this distress. Marginal and small farmers have borne the brunt of the adverse circumstances in agriculture. Concerned by the slow growth in the agriculture and allied sectors, the Government of India has launched a series of programmes/schemes in recent years to rejuvenate agriculture and improve farm income. The present work explains and examines the key reform measures undertaken for the modernization of Indian agriculture. Challenges facing this vital sector of the economy are also set forth.