PM Modi sets up panel on doubling farm incomes in 5 years
The Narendra Modi government has set up an inter-ministerial panel to devise a plan to double farm income in five years, a promise made in this year’s budget, which some economists say will require miraculous agricultural growth.Updated: May 03, 2016 01:25 IST
The Narendra Modi government has set up an inter-ministerial panel to devise a plan to double farm income in five years, a promise made in this year’s budget, which some economists say will require miraculous agricultural growth.
A back-to-back drought in 10 states has shriveled crops and caused rural wages to dip, stoking a challenging rural distress for the government. The panel will submit a report in two months, suggesting ways to boost farmers’ income.
In his budget speech, finance minister Arun Jaitley said: “Government will, therefore, reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022.”
But many economists doubted the plan, saying a “nominal” increase of 50% in farm income would not mean much and has happened before. The real test is to increase “real” income.
If it is just a “nominal rise” — a term economists use for income not adjusted for inflation — then it is possible, economist Abhijit Sen said. Income growth is always benchmarked against rise in prices because inflation shrinks purchasing power.
If the increase in farm income has to be “real” — or income adjusted for inflation — then it’s “a lot of fluff”, Sen told HT.
The Opposition has often criticised the ruling NDA of throwing “jumlanomics” or making boastful claims with regard to the economy.
The National Sample Survey Organisation says the average farm household earns Rs 6,426 a month. Farm income grew fastest between 2004-05 and 2011-12, when it had in fact doubled nominally, that is without taking into account the inflation rate.
The committee formed to devise a turnaround is headed by Ashok Dalwai, an additional secretary with the farm ministry. It will study the current income levels of farmers and determine the growth in agriculture required to double farm income, apart from what strategies that need to be adopted, a farm ministry order states.