Reform of grain management system could free up resources for infrastructure investment.
With GDP growth rate plummeting to 4.5 per cent and with the agriculture GDP (GDPA) growth at 2.1 per cent in the second quarter of this fiscal year, everyone concerned with the economy is anxious. The question being asked is whether the Indian economy can be put back on the 7-8 per cent growth trajectory and can agri-GDP grow at least at 4 per cent.
It may be noted that in UPA 2 and Modi 1.0, while the average GDP growth rate was 7.2 and 7.5 per cent respectively, agri-GDP (GDPA) growth slowed in the Modi period to 2.9 per cent, far below the 4.3 per cent rate achieved during UPA 2. And now, when the quarterly growth in GDPA is hovering at around 2 per cent, it is a cause for great concern (Figure-1). Agriculture still engages about 44 per cent of India’s workforce. If the masses do not gain from the growth process, their incomes remain subdued, then the demand for manufactured goods, housing and other goods will remain low. Low demand in the economy is one of the main reasons behind India’s great slowdown today.
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