India: Economic Survey 2010-11

Recovering from the global economic recession impacts, India recorded a growth rate of 8.0% in 2009-10 and the current year’s expectation is at 8.6%. While the services sector showed deceleration and the manufacturing sector maintained the status quo, the agricultural sector showed upsurge, which helped in advancing the overall growth rate in 2010-11.

The agricultural and allied sectors contribute 14.2% of the GDP (2004-05 prices) and the growth rate is estimated at 5.4%. The contribution of the sector recorded a growth rate of only 3.46% during 2004-05 to 2010-11 while the average growth of Indian economy was 8.62%.

The green revolution in 1960s with the scientists and farmers joining hands, paved the way for food security in India. No technological breakthrough was noticeable since then, and the need for higher production was growing, a second green revolution seems inevitable. And to cater to the food security and food safety net, India needs a higher production along with enhanced productivity in cereals, pulses, oilseeds, vegetables, poultry, meat, milk and fish. To achieve this goal, India needs to invest more in agriculture and allied sectors.

The performance of agricultural sector is vital as around 58% of Indian work force depend on it besides it remains the source of food and nutrients for the masses. The growth rate which was 5.8% in 2007-08 declined to -0.1% in 2008-09 and improved to 0.4% in 2009-10, showed 5.4% in 2010-11. But to achieve the targeted 4% per annum (current five year plan), this sector should grow at 8.5% in 2011-12.

The food grain production showed growth during 2005-06 to 2008-09 but showed a decline subsequently, but is expected to achieve record production during the current financial year against a shrinking cultivable area. There is no growth in production in coarse cereals but the production of pulses is almost steady. But the production of oilseeds and cotton is on the rise.

Things are totally different in the livestock and fisheries sectors. The contribution of these sectors amounted to 4.07% of the GDP and 29.7% of the output value of the entire agricultural sector in 2008-09 and is expected to grow at 6-7% with 112.5 million tonnes of milk, 59.8 billion eggs, 4.0 million tonnes of meat,  43.2 million kg of wool, 529.7 million livestock and 648.8 million poultry (2007 Census).

The milk production of India has grown to 112.5 million tonnes in 2009-10 from a paltry 17 million tonnes in 1950-51. And the per capita consumption of milk too has shown substantial improvement with 263 G/day (2009-10) as against 112 G/ day in 1968-69. (Even at 263 G/day, it is still low compared to the world average of 279.4 G/day but slightly higher than the average of developing countries). The production has grown six times since independence and is growing at 4% per annum.

The demand for milk in 2021-22 is estimated at 172.20 million tonnes as against the current 112,5 m tonnes (Planning Commission estimates) but the India Dairy Plan of NDDB projects the demand at 180 m tonnes. The statistics shows that the demand grows by 6 m tonnes /year while the production grows by 3.5 m tonnes/year. The demand may further go up with the accent in the economy, population and health awareness. The per capita availability of eggs stands at 51 eggs per annum.

The unorganized sector handles 80% of the milk production while co operatives and private sector handle the remaining 20%. The Economic Survey 2010-11 finds the poor productivity and not-so-satisfactory marketing system, ineffective breeding programme, non availability and non affordability of feed and fodder, improper veterinary infrastructure, deficiencies in prevention of diseases, inadequate research capacity, limited processing capacity, lack of transport and limited access to formal credit mechanisms to farmers as some of the major impediments to the growth of the sector.

To achieve the set goals, a growth rate of 5.5% is necessary during the next decade or so. Poor achievements will lead to imports which may in turn help rise the global price of milk. We need a focused and righteous attention together with proper investment to this sector to achieve the targets.

The term of the 10 year period of National Project for Cattle and Buffalo Breeding (NPCBB) is almost over. The cattle insurance schemes currently operated in 300 districts are to be spread to all the potential areas. Assistance to states for achieving disease-free-status is to be further enhanced. The avian-influenza-free-status of India is questioned with the recent emergence of the disease in Tripura. Further efforts are needed for the production of feeds and fodder. The credit system is to be streamlined with free access to farmers at interest rates on par with that available to the agricultural farmers of the country. The advantages of the venture capital funds should be made available to all the farmers of the sector.

Let us hope that the Budget for 2011-12 will bring more schemes and more funds to this sector.