Economic Survey calls for farm sector reform

The Economic Survey 2007-08, expressing concerns over the deceleration in the growth rate in agriculture and allied sector, has called for appropriate reforms, including targeting of food and fertilizer subsidies.

Agruculture, forestry and fishery together is expected to grow at 2.6% in 2007-08 as against the previous year's growth of 3.8%. due to the lower production of winter crops. In the period 1950-2007 foodgrains output increased at an average annual rate of 2.5% compared to the population growth which averaged 2.1% during the period. But in 1990-2007 foodgrains output growth rate decelerated to 1.2%, lower than the annual population growth rate averaging 1.9%.

"Any deceleration in the growth rate of this sector is translated into a lower overall GDP growth rate. Acceleration of growth of this sector will not only push the overall GDP growth upwards, it would also make the growth more inclusive and biased in favour of women. Increasing farm incomes is also necessary for an equitable growth," the survey said.

The overall GDP growth in 2007-08 is expected at 8.7%. The share of agriculture in the GDP has registered a steady decline from 36.4% in 1982-83 to 18.5% in 2006-07. Yet this sector continues to support more than half a billion people, providing employment to 52% of the workforce, according to the survey. "Raising overall economic growth to double digit will therefore require additional reforms," it said.