The path towards a stronger India


India is a land of wonders that has a huge untapped potential which, if channelized, can bring about a revolution in the field of science and technology. With 1.25 billion population, India needs to reinvent itself as a hub of economic growth and overcome income disparity. There is a huge wage gap in the Indian demographics that leads to an ever-widening rift between the different social classes. To capitalize on its demographic dividend, India must create well-paying, high productivity jobs. Of India’s total workforce of about 52 crore, agriculture employed nearly 49 per cent while contributing only 15 per cent of the GVA. Comprehensive modernization of agriculture and allied sectors are needed urgently. In contrast, only about 29 per cent of China’s workforce was employed in agriculture. Industry and services accounted for 13.7 and 37.5 per cent of employment while making up for 23 per cent and 62 per cent of GVA, respectively.

India also needs a huge reform in the labour laws that are creating obstacles in the individual growth of farmers and daily wage labourers. A large number of workers that are engaged in the unorganized sector are not covered by labour regulations and social security. This dualistic nature of the labour market in India may be a result of the complex and large number of labour laws that make compliance very costly. In 2016, there were 44 labour laws under the statute of the central government. More than 100 laws fall under the jurisdiction of state governments. The multiplicity and complexity of laws make compliance and enforcement difficult.

Farmers also need to be provided with state-of-the-art facilities as more than 60% of Indian population is employed by the agricultural sector. The existing yield levels of a majority of crops remains much lower than the world average. The predominant causes are low irrigation, use of low quality seeds, low adoption of improved technology, and knowledge deficit about improved agricultural practices. Close to 53 per cent of cropped area is water stressed. Rainwater management practices and services are resource starved. This limits a farmer’s capacity to undertake multiple cropping and leads to inefficient utilization of land resources.

As per Niti Aayog reports, the mismatch between the contribution of agriculture to national income and share in employment has remained large and has widened. The manufacturing and service sectors have failed to absorb the excessive workforce in agriculture. Consequently, value addition per worker in agriculture grew slowly and income per farmer never crossed one-third of the income of a non-agriculture worker since the 1980s. The country took 22 years to double farmers’ income at an annual growth rate of 3.31 per cent during 1993-1994 to 2015-16; doubling farmers’ income between 2015-16 and 2022-23 will require an annual growth rate of 10.4 per cent in farmers’ real income.

In consultation with all stakeholders, the Government of India should come up with a coherent and stable agricultural export policy, ideally with a five to ten-year time horizon and a built-in provision for a mid-term review. It is the responsibility of the government to conceptualize a committee of experts and make efforts to achieve these goals with immediate effect.


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