Economic Survey 2023-24 calls for increased private investment to boost agriculture sector efficiency

Neeraj Mohan 

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New Delhi, July 22

Finance Minister Nirmala Sitharaman presented the Economic Survey of India 2023-24 today on the opening day of the Budget session of Parliament, underscoring significant strides and ongoing challenges within India’s agriculture sector. The Survey reveals a robust average annual growth rate of 4.18% in agriculture over the past five years, though recent growth has moderated to 1.4% for the current year.

The Survey highlights that the agriculture sector, which supports approximately 42.3% of India’s population and contributes 18.2% to the GDP at current prices, has demonstrated resilience. This growth is attributed to increased investment in agricultural research and supportive policies, with a reported return of Rs 13.85 for every rupee invested in research. For the fiscal year 2022-23, Rs 19,650 crore was allocated to agricultural research.

In a call to action, the survey emphasises the necessity of elevating private sector investment to drive further advancements in agriculture. It advocates for scaling up investments in technology, modern production methods, and marketing infrastructure to enhance post-harvest management and reduce losses. Improved post-harvest infrastructure and food processing capabilities are crucial for minimizing waste and ensuring better pricing for farmers.

Foodgrain production reached a record 329.7 million tonnes in 2022-23, although projections for 2023-24 suggest a slight decrease to 328.8 million tonnes due to unfavorable monsoon conditions. Meanwhile, oilseeds production saw a significant increase, with total coverage expanding from 25.60 million hectares in 2014-15 to 30.08 million hectares in 2023-24, a 17.5% growth. This expansion has decreased the share of imported edible oil from 63.2% in 2015-16 to 57.3% in 2022-23.

The survey also highlights the progress of the e-NAM scheme, which aims to streamline agriculture marketing. As of March 2024, over 1.77 crore farmers and 2.56 lakh traders are registered on the e-NAM portal. Additionally, the government has initiated the formation of 10,000 Farmer Producer Organisations (FPOs) with a budget of Rs 6,860 crore. To date, 8,195 FPOs have been established, receiving equity grants and credit guarantees to bolster their operations.

In terms of farmer support, the survey notes the increase in the Minimum Support Price (MSP) for crops, ensuring a margin of at least 50% over the cost of production since 2018-19. The Pradhan Mantri Kisan Maandhan Yojna (PMKMY) provides a monthly pension of Rs 3,000 to enrolled farmers, with 23.41 lakh farmers currently benefiting from the scheme.

To address environmental concerns, the survey promotes the PM-PRANAM initiative, which incentivizes the reduction of chemical fertilizer use and encourages the adoption of alternative fertilizers. Additionally, the Pradhan Mantri Fasal Bima Yojana (PMFBY) continues to offer comprehensive crop insurance coverage, with an insured area of 610 lakh hectares in 2023-24 and total claims amounting to Rs 150,589.10 crore since 2016-17.

Overall, the Economic Survey 2023-24 outlines a period of growth tempered by challenges, urging continued investment and innovation to secure the future of India’s agriculture sector.