Economic Survey 2023-24 moots agriculture export bans, inflation targeting

New Delhi, July 22: The Economic Survey of India for the fiscal year 2023-24, presented by Finance Minister Nirmala Sitharaman, has highlighted the agriculture sector as a cornerstone of the Indian economy. Ziraat Times has compiled the key highlights related to the agriculture sector in the survey, for the benefit of its readers:

Transformation from Food Deficit to Net Exporter

The survey celebrates the Indian agriculture sector as a success story, marking the country’s journey from a food deficit nation in the 1960s to a net exporter of agricultural products. This transformation is a testament to the sector’s resilience and growth over the years.

Contribution to GDP

Agriculture continues to be a significant contributor to India’s Gross Domestic Product (GDP), supporting 42.3% of the population and contributing 18.2% to the country’s GDP at current prices. Over the last five years, the sector has shown robust growth, registering an average annual growth rate of 4.18% at constant prices.

Policy Recommendations

The Economic Survey outlines five policy recommendations for the agricultural sector:
1. Futures and Options Markets: The survey advises against banning futures or options at the first sign of price spikes, suggesting intelligent regulatory design to avoid bureaucratic interference.
2. Export Bans: It recommends invoking export bans only under exceptional circumstances, allowing farmers to benefit from higher international prices.
3. Inflation-Targeting Framework: The survey suggests re-examining the inflation-targeting framework to exclude food, as higher food prices are often supply-induced rather than demand-induced.
4. Irrigation and Water Utilization: There is a call for increasing the Total Net Irrigated Area and improving irrigation efficiency, which currently stands at 30-40% for surface water and 50-60% for groundwater.
5. Nutritional Security: The need of the hour is to move from basic food security to nutritional security, promoting a demand-driven food system that is nutritious and aligned with nature’s resource endowments.

Challenges Ahead:

The agriculture sector stands at the confluence of three great challenges: food and nutritional security, climate change, and sustainable use of critical resources. Addressing these challenges requires a multi-faceted approach that balances productivity with sustainability.

Technological Advancements and Practices

The survey emphasizes the adoption of better farming practices and technologies like drip irrigation and fertigation to enhance water utilization⁴. These advancements are crucial for ensuring the sector’s sustainability and resilience against climate change.

Supporting Farmers and Rural Economy

The survey underscores the importance of aligning farm sector policies with a ‘demand-driven food system’ that is more nutritious and sustainable. It also highlights the need for policies that function in the interest of farmers, ensuring that they are the primary beneficiaries of the sector’s growth.

In conclusion, the Economic Survey 2023-24 paints an optimistic picture of the Indian agriculture sector, recognizing its past achievements and laying out a roadmap for future growth. The recommendations provided aim to ensure that the sector continues to thrive, contributing to the nation’s economic prosperity while addressing the pressing challenges of food security, nutrition, and sustainability. The focus on technological advancements, policy reforms, and support for farmers reflects the government’s commitment to strengthening the backbone of the Indian economy.