Structural Transformation of Indian Agriculture

Union Budget 2025-26 which was presented on February 1, 2025 has focused on structural and medium to long term issues in the agriculture sector. These reforms can ensure that the agro sector remains a major engine of growth, raising real farm income over time while ensuring food and nutrition security. The aim of these measures is to make agriculture an attractive and productive sector to work on and remove disguised unemployment and minimise rural to urban migration. This article focuses on understanding the implications of the agro announcements.

- Rajarshi Ghosh

Rationale for improving agro productivity through Structural Measures

Since 2014-15, there has been a mild growth of crop production at a CAGR of 2.1 per cent. If we study major crops, we find that cotton has been stagnant while cereals have shown slightly higher growth. Pulses grew more rapidly but with more volatility and oilseeds production has expanded. Only some of this increase in crop production resulted from area expansion. Our research shows that the gross cropped area increased somewhat for rice, pulses and oilseeds. It was largely stagnant for wheat and cotton and actually declined for traditional cereals. However, yield growth was fastest for cereals, much more than rice and wheat. And yield is uneven area wise too. All these bring us to the need of structural measures to boost agro productivity across the country specially in low yield districts and hence comes the need of structural transformation in agriculture. Basically the second Green Revolution has to be pan India and not restricted to a few States.

I) PM Dhan-Dhaanya Krishi Yojana: The Yojana mainly focuses on developing agricultural district programmes on the lines of the Aspirational Districts Programme (ADP), a Government of India programme aiming to develop some of the country's most under- developed districts. Nearly two decades ago, in a study, we had mentioned to the government that there are many developmental schemes and all are not evenly utilised round the year. And if we could merge some of the small schemes a mega developmental scheme can be created and through this scheme the same has been done. Through the convergence of existing schemes and specialised measures, this programme promises to cover 100 districts with low farm productivity, post-harvest losses, inadequate access to irrigation and credit, absence of crop diversification and absence of environmentally sustainable cropping practices.