India’s agri sector demonstrates growth on back of favourable weather, enhanced productivity: Eco survey

Agricultural extension is vital in disseminating knowledge, says Economic Survey

India’s agriculture sector showed growth in the recent quarter on account of improved conditions, driven by favourable weather patterns, advancements in agricultural practices, and government initiatives to enhance productivity and sustainability within the sector, said the Economic Survey.

Tabled by the Finance Minister Nirmala Sitharaman in Parliament, the survey said the agriculture sector recorded a growth rate of 3.5 per cent in the second quarter of FY25, a recovery compared to the previous four quarters, during which growth rates varied from 0.4 percent to 2 percent.

“In recent years, the agriculture sector in India has shown robust growth, averaging 5 per cent annually from FY17 to FY23, demonstrating resilience despite challenges,” the survey added.

The ‘Agriculture and Allied Activities’ sector has long been the backbone of the Indian economy, playing a vital role in national income and employment. This sector contributes approximately 16 percent of the country’s GDP for FY24 at current prices and supports about 46.1 percent of the population, the survey said.

“Not only does its performance directly impact food security, but it also influences other sectors, sustaining livelihoods and supporting economic growth,” it added.

The survey pointed out that assured remunerative prices, improved access to institutional credit, crop diversification, support for sustainable practices, and enhancement in productivity have played a crucial role in the sustained growth observed.

Enhancing productivity

The survey said that the government is implementing a range of initiatives aimed at enhancing agricultural productivity and increasing farmers' incomes. These measures include using alternative and organic fertilisers to enhance productivity and sustainability.

“Committed to promoting greater input efficiency and adopting sustainable production practices, the government is pursuing initiatives such as Per Drop More Crop (PDMC) and various actions under the National Mission on Sustainable Agriculture (NMSA),” the survey said.

To encourage the adoption of innovative agricultural technologies and improve price discovery mechanisms, the government has introduced digital initiatives like the Digital Agriculture Mission and the e-National Agriculture Market (e-NAM).

Additionally, the government provides income support to farmers through assured remunerative prices for their produce, alongside programs such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).

Minimum support price

The survey highlighted that the minimum support price (MSP) serves as a guiding signal for farmers in planning their future crop compositions. The Minimum Support Price (MSP) for essential crops such as wheat, rice, pulses, oilseeds, and nutri-cereals acts as a safety net for farmers, reassuring them of a guaranteed minimum price for their crops from the government, it added.

The government has raised the MSP for nutri cereals (Shree Anna), pulses, and oilseeds as part of these initiatives. For the fiscal year FY25, the MSP for arhar and bajra has been increased by 59 percent and 77 percent over the weighted average cost of production, respectively. Moreover, the MSP for Masur has risen by 89 percent, while rapeseed has seen an impressive increase of 98 percent, it said.

Irrigation development

The Economic Survey states that the government has prioritised irrigation development and water conservation practices to enhance access to irrigation facilities.

Since the FY16 fiscal year, the government has been implementing the Per Drop More Crop (PDMC) initiative, a component of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), to promote water efficiency. Financial assistance is provided at 55 percent of the total project cost for small and marginal farmers, and 45 percent for other farmers for installation of micro irrigation under PDMC.

From FY16 to FY25 (end of Dec 2024), Rs 21968.75 crore was released to states for implementation of PDMC Scheme and an area of 95.58 lakh hectare has been covered, which is about 104.67 percent higher as compared to the Pre-PDMC period, the survey said.