Centre plans new method to measure farmer income
The Indian Prime Minister Narendra Modi had declared way back in 2016 that his government aims to double farm incomes in the upcoming six years. This is highly significant as over half the nation’s population relies on farming to sustain their living.
Why is this announcement significant?
- While the agricultural sector contributes barely 14% to the Indian Economy, it employs over half of the Indian population.
- The agricultural sector in India is under duress and needs a comprehensive fiscal stimulus after successive droughts which have to lead to several crop failures and loss of income for the farmers.
- The aim of the government is to increase the farm:non-farm income of the farmers from the current 70:30 to over 60:40 in the near future.
How will this happen?
- The government needs to ensure a growth rate of 10.4% year-on-year to double farm incomes by 2022-2023.
- However, the current rate of agricultural growth is 2.9% per year.
- Hence, the government needs to grow the agricultural sector by over 15% over the coming years to bridge the shortfall.
How is the government doing this?
- The Indian Government has decided to calculate the household earnings on the base year of 2016-2017 and a third income is targeted from non-farm sources like a cooperative or a rural enterprise.
- The Government has also initiated schemes like PM-Kisan which aim to transfer over Rs 6000 per year to farmers.
- It aims to create specific farm clusters which specialize in specific crops to create a value chain.
- The Indian Government also looks to scale up the credit to rural self-help groups and abolish mandi fees.
- The government has decided to go by the income figures which were generated by the first NABARD All India Financial Inclusion Survey or NAFIS which was conducted in August 2018.