unit 2 CH 1 1 Indian Growth and dev.
unit 2 CH 1 1 Indian Growth and dev.
content. These notes are structured with clear headings and subheadings, include key data
points and tables’ insights, and are written in an easy-to-learn format so you can review without
needing to refer back to your book.
Core Focus:
To examine the progress made in Indian agriculture over recent decades and outline the
policies and reforms necessary for transforming agriculture in the next decade. The study is built
around three fundamental goals:
○ Agriculture remains a primary livelihood for nearly 48% of the Indian workforce
despite contributing around one-seventh to GDP.
● Historical Evolution:
○ Green Revolution:
● Interlinkages:
○ Sustainability Goals:
○ Recognizes the need to boost incomes via both production gains and diversified
(non-farm) income streams.
B. Inclusiveness (Equity)
● Target Groups:
○ Small and marginal farmers (marginal holdings account for 69% of total holdings
yet are economically vulnerable).
○ Surveys (NSS and NABARD) show that many agricultural households have 2–4
income sources compared to non-agricultural households, where single source
income is more common.
● Inequality Dimensions:
○ Gini coefficients reveal that income and wealth inequalities (Gini around 0.55 and
0.74 respectively) far exceed consumption inequality (around 0.38).
○ State-level disparities (e.g., Bihar, Kerala, Gujarat) and village-level variations
indicate the need for targeted policy interventions.
C. Sustainability
○ Promote modern technology for efficient water use, crop management, and
post-harvest handling.
● Global Commitments:
○ Align with the Sustainable Development Goals (SDG 2 and others) and initiatives
like Compact2025 to address hunger and undernutrition.
● Nutritional Security:
○ Update the policy discourse to fit the new context of global and domestic
challenges.
○ Ensure fair prices through improved market mechanisms and price discovery.
○ Provide farmers with greater freedom in entering markets and exporting produce.
● Economic Convergence/Divergence:
● Technological Disruption:
● Population Trends:
○ Global urban share is projected to increase from 55% (2018) to 68% by 2050,
impacting agricultural supply chains and value chains.
● Governance Gaps:
○ Changes in dietary habits (e.g., rising demand for non-foodgrain products) driven
by increased income and urban lifestyles.
D. Price Dynamics and Inflation
○ Recent data indicate that the inflation rate in agricultural prices (via implicit
deflators) has been lower than overall inflation, adversely affecting farmer
income.
● Terms of Trade:
○ Lower farm price rises compared to the general price index (CPI) suggest that
farmers’ purchasing power has been impacted.
● Agricultural GDP+:
● Coefficient of Variation:
○ Pulses have historically experienced high variability (as high as 20% coefficient)
compared to cereals. Recent decades show marked improvements in stability.
○ Tables show that agricultural inflation (price changes in farm outputs) has
generally lagged behind total GVA price inflation.
○ Food CPI inflation has trended lower than overall CPI, reflecting a challenging
terms-of-trade environment for farmers.
○ Area Trends:
○ Value of Production:
■ The relative contribution from paddy, wheat, and pulses has seen a
reduction, while the share of high-value crops, condiments, spices, and
horticulture has increased.
● Allied Activities:
○ Over time, the share of workers in agriculture has declined relative to non-farm
sectors.
○ Data indicate that rural non-farm employment has grown from 19% (in 1983) to
36% (in 2011–12), with particularly notable increases post-2004.
● Income Sources:
○ NSS and NABARD surveys reveal that many rural households derive only
23%–48% of their income from agriculture, with wage labor and non-farm
activities forming a substantial share.
○ Government focus on not only increasing production but also boosting overall
income through diversified activities.
● Shrinking Holdings:
○ Average farm size has declined from about 2.3 hectares (1970–71) to roughly
1.08 hectares (2015–16).
○ Marginal farmers (holdings of less than 1 hectare) now comprise about 69% of
total holdings and 86% of farm households, even though they control less than
half of the cultivated area.
● Challenges for Small and Marginal Farmers:
○ The viability and profitability of very small holdings are under pressure, calling for
targeted support.
○ Variability in income inequality across states (e.g., Bihar reaching 0.61, Gujarat
as low as 0.43) and across villages (Gini ranging from 0.372 to 0.781 in PARI
studies) emphasizes the need for localized policy solutions.
○ NSS data (2003 vs. 2013) show that while the share of cultivation remains high
(around 46%–48%), income from animals and wages has changed.
○ NABARD data (2015–16) illustrate that only about 35% of income in agricultural
households is from cultivation, with non-farm and wage components
(government/private services, other enterprises) forming a larger share when
considering all rural households.
● Technological Shifts:
○ Global trends such as automation and digitization are influencing rural labor
markets and will likely impact agricultural productivity.
● Inclusive Development:
8. Concluding Summary
● Transformation Imperative:
● Interconnected Goals:
● Path Forward:
○ Despite economic growth, malnutrition among women and children remains high
in India.
● Impact of Undernutrition:
○ International studies suggest that the decline in child undernutrition typically lags
behind per capita GDP growth.
● Underweight:
● Wasting:
● Anaemia:
○ In 2015–16, approximately 58% of children and 53% of women (15–49 years) are
anaemic.
○ The lowest wealth quintile shows very high malnutrition (around 51% stunting)
compared to the highest wealth quintile (around 22%).
○ Social groups (Scheduled Castes and Scheduled Tribes) and lower education
levels are associated with 10–20 percentage points higher malnutrition levels.
C. Regional Variation
● State-Level Patterns:
○ States like Kerala, Punjab, Himachal Pradesh, Tamil Nadu, and Jammu &
Kashmir have the lowest levels (e.g., Kerala at approximately 19.7% stunting).
○ In contrast, Bihar, Jharkhand, Uttar Pradesh, and Madhya Pradesh have high
malnutrition levels (above 40% stunting).
● District-Level Insights:
D. Implications
● Improving agriculture–nutrition linkages is key not only to boost agricultural growth but
also to enhance equity and human development.
● Policy efforts must address both food availability and nutrition outcomes, especially for
vulnerable groups in rural areas.
2. Sustainability in Agriculture
A. Definition and Context
● Sustainability Defined:
○ “Development that meets the needs of the present without compromising the
ability of future generations to meet their own needs” (Brundtland Commission,
1987).
● Focus Areas:
● Ecological Impacts:
○ Expansion of cropped areas into forests and fragile terrains has increased soil
erosion.
○ Intensive livestock production contributes to water and land quality issues.
○ Problems include soil erosion, loss of organic carbon, nutrient imbalance, and
salinization.
○ Overuse of free or subsidized power for groundwater pumping has led to falling
water tables.
● Vulnerability:
○ Projected Impacts:
■ Average farm income losses from climate change could range between
15–18%, rising to 20–25% in unirrigated areas.
● Linkages to Agriculture:
○ Fiscal, monetary, trade, tariff, and exchange rate policies affect agricultural
growth.
● Key Goals:
● Global Context:
● Objective:
● Challenges:
○ Real income growth for farmers has been low (approximately 2.5% per annum in
recent years).
○ Regional disparities and high income volatility for marginal and small farmers.
● Government Initiatives:
○ Programs like Pradhan Mantri Krishi Sanchay Yojana, Pradhan Mantri Fazal
Bhima Yojana, soil health cards, and e-NAM are examples aimed at enhancing
productivity and incomes.
● Key Issues:
○ Criticisms of MSP: limited crop coverage (mostly rice and wheat), regional
biases, and failure to cover a majority of farmers.
○ Recent policy moves (e.g., announcing MSP at 1.5 times A2+FL cost for Kharif
crops) are steps forward.
○ Studies indicate that despite subsidies, farmers in India are net taxed relative to
peers in other countries.
● New Initiatives:
● Emerging Trends:
○ A new wave of agricultural start-ups (both input- and output-based) using mobile
and online platforms.
● Impact:
○ These initiatives are beginning to alter the value chain by reducing inefficiencies
and cutting out excessive intermediaries.
● Policy Recommendation:
○ Support entrepreneurial activities in agriculture through targeted start-up funds
and improved technology incubators (potentially under the aegis of ICAR).
● Significance:
○ Programs like the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) are positive
moves.
● Issues to Address:
○ Despite high investment, net irrigated areas under canals are shrinking and
operation & maintenance (O&M) costs are not covered by current pricing.
○ Modern seeds, fertilizers, credit systems, and extension services are essential to
boost productivity.
● Public Investment:
● Legal Reforms:
○ There is widespread consensus on the need to legalize land tenure and leasing.
○ Model Leasing Acts have been proposed to provide secure tenure for tenants
and ensure that smallholders access credit and insurance.
● Digital Initiatives:
● Challenges:
○ Discrepancies between official land records and the ground situation persist.
● Policy Focus:
○ Improving land records and ownership titles is crucial for both tenure security and
credit facilitation.
○ Support for innovation, including start-ups, and improvements in value chains will
further enhance farmers’ participation in modern markets.
● Call to Action:
○ A balanced and integrated policy mix is needed to ensure that growth, equity, and
environmental sustainability are achieved simultaneously. Special focus is
required on small and marginal farmers, enhancing nutritional outcomes, and
protecting natural resources for future generations.
Below is a comprehensive set of detailed, revision-style notes covering all the topics in the
provided content. These notes are organized by major themes and subtopics. They highlight
key statistics, research findings, policy suggestions, and institutional issues—so you have a
standalone guide that integrates technology, research, extension, inclusiveness, sustainability,
climate change, and many related concerns.
● Productivity Gap:
○ India's yields and total factor productivity (TFP) are lower than those in countries
like Brazil, China, and Indonesia.
● Investment Levels:
○ Higher investment in extension services could help realize the potential income
gains—studies suggest farmers lose over two thirds of potential income due to
suboptimal crop and input choices.
B. Emerging Technologies and Innovations
○ India’s cautious stance: while Bt cotton has been approved, genetically modified
food crops (e.g., Bt Brinjal, Mustard, and Chickpea) have not been approved due
to concerns over food safety, corporate control, and seed pricing.
● Gene Editing:
○ Digital India aims to connect rural areas with high-speed internet, improving
information flow and extending extension services.
○ A key potential exists to improve technical know-how and optimum input use,
which can raise yields significantly.
Key takeaway: To boost TFP and close the yield gap, India must invest more in research,
modern biotechnology, extension services, and IT infrastructure; these efforts must work in
tandem with building stronger institutional support.
2. Policies on Inclusiveness
A. Viability of Small and Marginal Farmers
● Farm Size and Income:
■ For instance, one survey found that for the smallest holdings (<0.01 ha),
income is very low compared to larger holdings (income and consumption
data reveal an inverse relationship between farm size and per–unit
income, though the gap is narrowing over time).
○ These farmers face multiple risks: production, weather, price, credit, market, and
policy risks.
○ Often, they must supplement low farm incomes with non-farm employment.
○ Special support systems (credit, input delivery, market access) are crucial.
● Regional Disparities:
○ The Eastern region faces the highest levels of poverty despite fertile soils and
water availability.
○ This region has significant scope for a “second Green Revolution” given its
potential for high yields, especially in rice and emerging high-value crops.
C. Women in Agriculture
○ With male migration to non-farm jobs, nearly 75% of rural women participate in
agriculture compared to about 59% of rural men.
● Challenges Faced:
○ Women often have limited property rights and restricted access to credit,
technology, and extension services.
○ They perform a wide range of agricultural tasks but frequently are excluded from
decision-making and official records.
● Policy Measures:
● Impact Evidence:
○ Studies in Kerala and Telangana have shown that women group farms can
outperform individual male-managed farms, especially in commercial crop
sectors.
● Current Trends:
○ Over 56% of rural youth (15–29 years) remain in agriculture, forestry, or fishing.
○ However, declining profitability deters many young people from pursuing farming
careers.
3. Agriculture–Nutrition Linkages
A. Pathways Connecting Agriculture and Nutrition
● Key Roles:
1. Agriculture provides both food (direct source) and income (which affects food
choices).
2. Source of Income: Higher incomes enable improved diet and health.
● Diversified Diets:
● Women Empowerment:
○ Improving the productivity and income levels of women farmers is vital for better
nutrition.
● Sustainable Production:
● Resource Concerns:
○ For example, the social cost of cultivating water-intensive crops like rice (which
also impacts soil and water quality) should be factored into MSP calculations.
○ Studies indicate that extreme temperature shocks can reduce yields by around
4–5%, and extreme rainfall shocks by as much as 12–13% (with corresponding
income losses).
● Adaptation Strategies:
○ Crop insurance schemes like Pradhan Mantri Fasal Bhima Yojana (PMFBY) with
low premiums and efficient claim settlements can buffer risks.
○ Initiatives such as the National Initiative for Climate Resilient Agriculture (NICRA)
have demonstrated promising technologies (e.g., early maturing and
submergence-tolerant paddy varieties, site-specific nutrient management,
conservation tillage).
○ Widely promoted within the rice–wheat system (notably zero-till wheat following
rice).
○ Relies on natural inputs (e.g., cow urine, bio-fertilizers) and avoids chemical
fertilizers/pesticides.
○ Adoption has reached millions in states like Andhra Pradesh, with plans for
further expansion.
○ Policies should incentivize food production methods that protect human health
and the environment.
● Inequalities in Consumption:
■ Use digital tools to link farmers with markets, improve extension services,
and enable efficient agricultural value chains.
● Final Note:
The transformation of Indian agriculture is multi-dimensional. It requires not only
technological innovation and enhanced research but also comprehensive policy reforms
that encompass market, social, and environmental dimensions. Focusing on these pillars
will enable India to achieve higher productivity, double farm incomes, promote inclusive
growth, and ensure a sustainable future for its agricultural sector.
Below is an integrated set of detailed, revision-style notes covering the “Institutions and
Governance” section as well as the overall conclusions of the paper. These notes have been
structured into clear sections and bullet points to help you review the role of institutions in
transforming Indian agriculture and to reinforce key policy messages.
● Key Role:
○ They underpin the entire agricultural value chain—from input supply and
land/water management to marketing, output handling, and natural resource
governance.
● Delivery Systems:
○ Inefficient public delivery systems lead to increased costs and quality issues
(e.g., substandard seeds and pesticides).
○ Reforms are needed to ensure more efficient access to inputs, credit, and
extension services—especially for small farmers.
● Marketing Reforms:
○ New initiatives (e.g., e-NAM, contract farming models, and alternative marketing
channels like Rythu Bazars) are examples of efforts to improve price discovery
and market efficiency.
B. Land and Water Management
● Water Institutions:
○ The participation of user groups through Water User Associations (WUAs) and
participatory irrigation management (PIM) is essential.
○ Currently, only a subset of states have enacted PIM Acts and only a few projects
report successful functioning of WUAs.
● Land Reforms:
○ The strengthening of land records (through initiatives like the Digital India Land
Records Modernisation Programme) and legalizing land leasing and tenure
security are vital for smallholder empowerment.
● FPOs Role:
○ They are designed to help small and marginal farmers achieve economies of
scale in input procurement and output marketing.
○ Many FPOs exist only on paper; thus, capacity building and financial support are
needed so that these groups can actively participate across the value chain.
○ Best practices include alternative markets (Rythu Bazars), contract farming (e.g.,
in broiler poultry and grape production), and farmer federations (such as the
Timbaktu Collective).
● Institutional Platforms:
● Resource Management:
● Policy Recommendations:
○ Improve Institutional Efficiency:
■ Streamline input and service delivery, ensuring quality and fair pricing.
○ Doubling farm income requires more than just improved production; it also
necessitates better market access and non-agricultural income opportunities.
○ Reforms in marketing and price support are critical since farmers continue to
receive low prices irrespective of output levels.
○ Special focus on small and marginal farmers, women, and disadvantaged regions
is essential to reduce inequality.
● Enabling Environment:
● Moving Forward:
○ Both central and state governments have a critical role to play in reforming
institutions through decentralized, farmer-centric approaches.
● Key Message:
These notes encapsulate the detailed discussion on the importance of institutions and
governance for achieving sustainable and equitable agricultural development in India, along with
the overall policy conclusions of the paper. They serve as a comprehensive study guide to
prepare for examinations without needing to refer back to the original text.
Analysis Note:
I reviewed the provided content and integrated all key points—including those on the role of
farmer producer organizations, decentralization, water management institutions, and collective
action initiatives—along with the summarized conclusions. This comprehensive synthesis
reflects both the detailed institutional aspects and the broad policy roadmap as outlined in the
source material.