Budget 2016 | Reviving the farm sector

The govt has its task cut out with rural distress affecting the country’s agriculture sector


Photo: Indranil Bhoumik/Mint
Photo: Indranil Bhoumik/Mint

Rural India is experiencing a protracted period of distress because of two consecutive monsoon failures and low agricultural commodity prices.

While the agricultural growth rate is abysmal, exports have tumbled—hurting rural incomes. Ten states declared a drought last year, but numbers show job creation under the employment guarantee scheme didn’t keep pace in providing relief to rural households.

While the centre has allowed states which notified a drought to increase workdays under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) from 100 days to 150 days, most states are struggling to reach the half-way mark. Worse, the pace of growth in rural wages is at its lowest, hurting demand, as can be seen from the declining sales of tractors.

So, for the Union Budget to be presented on Monday, one of the challenges is to revive growth in agriculture and improve farm incomes.

Growth in agriculture GDP

Unremunerative prices of key crops

Value of agriculture exports

Drought assistance

Rural wages

Barometer of rural demand

Performance of MGNREGS in drought-hit states