NABARD Recruitment 2019-20 | PaGaLGuY

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NABARD Grade A 2019

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Effects of the slowdown in agriculture and allied activities on the Indian economy.
  • Cascading effect of Sluggish agricultural growth: Real agricultural and allied gross value added (GVA) grew by 2.9% during 2011-12 to 2017-18. The National Agricultural Policy (2000) states that it should be 4% to attain an overall economic growth of 8%.
  • Supply-demand mismatch: A highly skewed and unprecedented monsoon, erratic rainfall, and extreme natural events are creating havoc as far as farms and farmers are concerned which in turn are likely to disrupt supply chains, fuel inflation and have a negative impact on consumption, all of which can further dampen the prospects of revival of the economy.
  • Delay in achieving India’s developmental obligation: The current growth rate in the farm sector is less than adequate to take on developmental challenges originating from the Sustainable Development Goals, mainly zero hunger, no poverty, life on land, and gender equality.

Hence any key reforms packages in improving the economy should also take cognizance of the crisis in the agricultural sector. Why agriculture is key to stimulate growth in the Economy

  • Importance of agriculture in the Indian economy:

o   The sector is a potential enabler and employer for more than 50% of the population. o   It also has the potential to revive “animal spirits” by ensuring farm viability like increasing the ratio of farm to non-farm income to 70:30 by 2022-23 from the present 60:40.

  • Deindustrialization 2.0:

o   Creative destruction is underway from the decreasing growth rate, and that slowly fading reform to stimulate the traditional sectors is adding to unemployment and job loss. o   There is an immense need to promote occupations that are less influenced by the slowdown such as farming, handloom, handicrafts, and others.

  • Dwindling aggregate demand: As per the Economic Survey 2018-19, the working-age population will continue to rise through 2041. The rising population, interstate migration, volatile oil prices, and market-distorting reforms resulted in subdued demand.

Key Reforms in agriculture can invigorate the economy

  • Investment of Rs 1 Crore in India can create only four formal jobs. There is an urgent need to increase the job-to-investment ratio which is currently very low especially in agriculture.
  • In-situ employment creation is a must for a stable income and spending which in turn can reduce interstate
  • There must be fast-lane options and swift actions to ensure curated reforms on land, market, price, and ameliorate supply-side constraint in order to achieve the target to double farmers’ income by 2022.
  • Expedite the setting up of the Agricultural development council (ADC) on the lines of the GST council.
  • Revisiting regional crop planning and the agro-climatic zone model at the highest possible level so as to make agriculture the engine of sustainable economic growth in India 2.0 by 2022.

This is the right time to execute a slew of doable agricultural reforms as the role of agriculture in reversing the slowdown is immense in the light of its nearly 20% contribution to a $5-trillion economy. The occasional dip in growth due to various reasons will slow the pace to achieving a $5-trillion economy by 2024. Therefore, a blend of efforts from a range of sectors, agriculture and allied sectors is warranted to enable overall growth.

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