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Indian Economic Policy

Notes (viii) Crop rotation helps to
(a) lessen use of pesticides (b) yield more crops
(c) produce a greater choice of plant products
(d) eliminate parasites which have selective hosts
13.4 Summary

• With nearly 12 percent of the world’s arable land, India is the world’s third-largest producer of
food grains, the second-largest producer of fruits and vegetables and the largest producer of
milk; it also has the largest number of livestock. Add to that a range of agro climatic regions
and agri-produce, extremely industrious farmers, a country that is fundamentally strong in
science and technology, a government committed to Indian agriculture and an economy that is
on the verge of double-digit growth, and you should have the makings of a bumper harvest.
• The story of Indian agriculture today is one of farmers at the grassroots stymied for money,
advice, basic technology, energy and water. The government, on the other hand, is more focused
on the larger though very real issues around food processing, warehousing and logistics.
• What was traditionally the food bowl of India - the Punjab-Haryana belt - has been devastated
by fertilizer abuse and consequent soil degradation that has made agriculture an unprofitable
business.
• The fertilizer subsidy bill doubled over the first seven years of the current millennium. The
subsidy growth has clearly overtaken the crop growth, with some estimates saying that at least
one-third of the subsidy goes to fertilizer producers.
• Long-term use of synthetic fertilizer has resulted in nutrient imbalance, micro-nutrient deficiency
and the deterioration of soil health, causing low agricultural productivity.
• In a developing country such as India, the dilemma between growth and preservation of the
natural habitat will continue to be posed for some time. However, the focus has to be on
improving agricultural yields through tried and tested technology, knowledge-sharing and
access to energy, credit and decent infrastructure.
• Moreover, increased funding for agriculture and rural development is a partial misconception
(see table). Standard credit delivery mechanisms do not help farmers because these banks -
even the inept co-operative banks - are not accessible by the bulk of farmers and, when they are,
there is no collateral to produce for loans.
• The finance minister admitted as much in his latest budget speech. Micro-finance as it is practiced
in India - despite its promise - has failed to deliver. The gaps in institutional credit, which were
to be covered by micro-finance, have thus attracted tremendous interest in recent years.
• The fifth area of concern is the sinister waste of water resources.
• The rainfall in India is not evenly spread - nearly 80 percent of it coming in the four-month
monsoon season from June to September. A sizable part of this water is allowed to flow away
wastefully to the seas, eroding precious soil on its way.
• The other side of the problem is around the quality and price of water. Low water rates - there
has been no revision for years - and a lack of uniform pricing across states and projects adds to
the abuse of water.
• The Central Ground Water Authority has issued regulatory directives for more than 100 ground
water blocks, and a 2010 World Bank report has warned that if indiscriminate exploitation of
the ground water continues unabated, as many as 60 percent of all the ground water blocks will
be in a critical condition by 2025.

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