Without factoring in agriculture, the vision of a $5-trillion economy will remain a distant dream
India’s dream of becoming a $5-trillion economy by 2024 is now in the open with a ‘blue sky’ vision envisaged in the Economic Survey this year. The document lays down a clear strategy to augment the growth of key sectors by shifting gears as the current economic conditions are smooth in terms of macroeconomic stability to expand growth. However, unless there are adequate investment reforms in primary sectors, steps taken to augment growth in other sectors would be futile.
Investment is the key
According to the Food and Agriculture Organisation (FAO), insufficient investment in the agriculture sector in most developing countries over the past 30 years has resulted in low productivity and stagnant production.
In India, with a steadily decreasing share of 14.4% in Gross Value Added since 2015-16, the sector’s contribution to a $5-trillion economy would be around $1 trillion — assuming a positive annual growth rate hereafter.
Investment is the key to unlocking the potential of a developing economy. However, the myopic policy regime in the past several decades has resulted in sluggish investment growth in the farm sector. Therefore, strengthening the sector with an enabling investment package (both public and private) is critical.
First, the wave of investment should touch segments such as agro-processing, and exports, agri-startups and agri-tourism, where the potential for job creation and capacity utilisation is far less. Integrating the existing tourism circuit with a relatively new area of agri-tourism (as a hub-and-spoke model), where glimpses of farm staff and farm operations are displayed to attract tourists, would help in boosting the investment cycle and generate in-situ employment.
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