GD on Agriculture in India-problems & challenges.docx

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AGRICULTURE IN INDIA- PROBLEMS & CHALLENGES Farm loan waivers by the newly elected Congress governments in Madhya Pradesh, Rajasthan and Chhattisgarh have hit the national headlines. According to a report published in MINT newspaper on January 22, 2019, Indian Government is considering a plan to transfer cash to farmers instead of offering subsidies on various agricultural inputs. “The government is planning to club all farm subsidies including fertiliser costs and instead pay farmers cash…,” notes the article. The plan for the handout comes after the Bharatiya Janata Party was voted out in key state elections last month, forcing the government to draw up a course correction before federal polls due by May. Agriculture in India: 50% Population Generating 17% GDP Agriculture contributes to 6.4% of the total world’s economic production. China is the largest contributor followed by India accounting for 19.49% and 7.39% of the total agricultural output respectively. India is the first and foremost an agriculture-based economy with 47% of its working population employed in the agriculture sector while China employs only 29.5% of its population in agriculture. With about half its population employed in agricultural activities, this should be a prominent source of India’s GDP if not the main source. In India, agriculture constitutes 17.32% of GDP as per 2018 data and this value has remained somewhat constant since 2011. Problems & Issues of Agriculture in India 1. Farming Debt - With the advancement of technology, capital is becoming a key factor in the development of agriculture. According to the NABARD, All India Financial Inclusion Survey (NAFIS) conducted by National Bank for Agricultural and Rural Development (NABARD) in 2016-17, 43.5% agricultural households reported to have borrowed any money from some source or the other. 60.4% of them reportedly borrowed from institutional sources exclusively. Further, 30.3% borrowed from only informal sources and 9.2% of agricultural households borrowed from both sources. The rural population is widely dependent on local money lenders for loans who charge very high interest rates. According to 2015 National Crime Records Bureau data , as many as 8,007 Indian farmers committed suicide in 2015, an increase of 41.7% from 5,650 in 2014, 39% of farmers who died in this manner were in debt. In 2014, 20.6% of farmers who killed themselves had borrowed money. 2. Agriculture Land Holdings - According to NAFIS, the average size of agricultural land holding of a household is 1.1 hectare in 2015-2016.
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