Presentation done by Ramesh Chand,Member NITI Ayog, Government of India on "Role and Place of Agriculture in Meeting Aspirations of Viksit Bharat " at #TheIndiaDialog on February 29, 2024 at Stanford University. The #TheIndiaDialog was organised by Institute for Competitiveness and US Asia Technology Management Center at Stanford University. #TheIndiaDialog looks at inviting the world’s leading experts and intellectuals in the areas of economics, business, policy, social development, science, technology, art and culture to provide their perspectives and foster an understanding of India. There would be a series of keynote addresses, panel discussions, and fireside chats during the dialog.

1. Role and Place of Agriculture in
Meeting Aspirations of Viksit Bharat

2. How Much Agriculture Matters for
Indian Economy and its Future
• Even after 7 decades of planned development, manufacturing remain
smaller than agriculture
• Agri growth is pro poor; inclusive character
• Food and nutrition security
• Natural resources sustainability and environment
• Water consumption : 80-90 %
• Land under agriculture: 46%
• Green house gases: 13%
2
Ramesh Chand
Sector Share in GVA %
2021-22
Share in work-force %
2022-23
Agriculture (crops +
Livestock)
15.6 N.A.
Agriculture & allied
(Agri + Fish+Forestry):
18.4 45.7
Manufacturing 15.8 11.4

3. Indian Agriculture- Story so far
(Policy Changes and its Impact)
5
•
•
•
Seven phases of
growth with six
structural breaks
Important policy
messages from each
phase. Lessons for
future.
Both troughs and
peaks have risen
Growth trajectory
accelerated to new
level in recent decade
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1960-61
1962-63
1964-65
1966-67
1968-69
1970-71
1972-73
1974-75
1976-77
1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2010-11
2012-13
2014-15
2016-17
2018-19
2020-21
Growth
rate/year
%
Decade ending with
Decadal moving average of annual rate of
change in GVA agri & allied

4. Anatomy of Agriculture Growth
1950-51 to 2021-22
4
2.97
-0.57
3.55
1.66
3.96
2.34
3.99
Different phases of Growth in GVA Agri
& Allied Av. Annual Rate of Change at
2011-12 prices
1951-62 Area expanded by 14%.
Restructuring and
reorganization. Reforms.
Irrigation projects. But poor
technology. Could not
sustain growth.
1962-67 Lessons. Technology is key.
1967-79 Tapped green rev tech with
supportive policies. Big
impact in irrigated areas.
1980-88 Green rev remained
confined.
1988-98 New tech expanded to
other crops. Wider
dissemination of tech. Div.
1998-10 Globalisation. Low prices.
2010-22 Growth revival. High
prices. New initiatives and
incentives.

5. Growth rate in GVA of Various Sectors
2011-12 to 2021-22
5
Sector
AAGR %
Sector share
in economy
%
Growth
percentage
point
Agriculture, forestry and fishing 3.68 18.97 0.70
Mining and quarrying 1.96 2.00 0.04
Manufacturing 6.32 15.84 1.00
Electricity, gas, water supply &
other utility services 5.50 2.59 0.14
Construction 3.92 8.10 0.32
Trade, repair, hotels and restaurants 6.42 10.48 0.67
Transport, storage, communication
& services related to broadcasting 5.69 6.37 0.36
Financial services 5.67 5.48 0.31
Real estate, ownership of dwelling
& professional services 8.08 16.03 1.30
Public administration and defence 4.95 6.23 0.31
Other services 6.30 7.89 0.50
Economy 5.52 100 5.52

6. Per Capita Food Production
Pointing towards Rise in Surplus
6
0.810
1.258
1.873
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
1.600
1.800
2.000
1950-51
1953-54
1956-57
1959-60
1962-63
1965-66
1968-69
1971-72
1974-75
1977-78
1980-81
1983-84
1986-87
1989-90
1992-93
1995-96
1998-99
2001-02
2004-05
2007-08
2010-11
2013-14
2016-17
2019-20
Per capita per day food output Kg
50% increase in fifty years
beginning 1951. Next 50%
increase in 25 years.
Fall in population growth
and acceleration in growth in
food output.
Food –feed competition very
low due to dominance of
vegetarianism. Meat
constitute only ……per cent
of total food output.
High prospects of
accelerated increase in
surplus (export) in medium
term.

7. Composition of Agriculture Sector
Agri commodity group Share (in %)
1970-71 1995-96 2020-21
Cereals 37.1 25.3 16.7
Pulses 4.7 4.2 3.9
Oilseeds 8.2 8.2 5.2
Fruits & Vegetables 12.4 14.6 19.4
Other crops, by products 22.6 22.0 17.9
Milk Group 10.2 17.4 24.3
Meat 1.6 3.8 8.1
Eggs 0.5 0.9 1.2
Other livestock products 2.8 3.5 3.3
7
• Cereal share shrinking at fast rate – despite high policy and R&D
support.
• Demand side measures driving growth rate of 72% agriculture.

8. The Story of States
Growth rate in Gross value added (2011-12 to 2021-22)
8
• Agriculture growing at more
than 8% per annum in two
states. Also more than g.r. in
non agri economy.
• More than 5% in other 6
states.
• Agri g r higher than 4% in
half of the states.
• Only 6 out of 22 states
witnessed less than 3% gr
• Agri has potential to
maintain 4% g rate for many
years. Sources?
Growth rate (Avg Y-o-Y % change)
State Agriculture & allied Economy
Andhra Pradesh 8.32 6.21
Assam 5.06 5.75
Bihar 2.92 5.12
Chhattisgarh 5.25 5.53
Goa 3.68 3.36
Gujarat 4.40 7.76
Haryana 3.24 6.28
Himachal Pradesh 3.60 5.60
Jammu & Kashmir 2.95 4.41
Jharkhand 3.65 5.01
Karnataka 6.01 7.12
Kerala -0.67 4.11
Madhya Pradesh 8.01 6.27
Maharashtra 4.82 4.79
Odisha 4.86 5.92
Punjab 1.93 4.52
Rajasthan 5.32 5.07
Tamil Nadu 5.08 5.64
Telangana 5.49 6.25
Uttar Pradesh 3.86 5.41
Uttarakhand 1.45 5.27
West Bengal 2.45 4.63
All India 3.68 5.52

9. Variation in Land Productivity and Sources

10. India and World
10
8.4
7.4
13.5
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
Share in World GVA Agri & allied at Current US$ Major boost after
liberalization and
globalization (post
WTO 1995)
Accelerated with
global food crisis that
pushed food prices.
Peaked 2019.
Highlights strong role
of prices (see ToT)
Indian agri doing
much better than
world and China
BUT, productivity still
lower than world av in
most crops.
Scope to become
global power in
agriculture
2.0
1.1
3.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
Share
(in
%)
Year
Share in World GDP (current US$)
Source: WDI

11. India’s Share in Global Exports
11
0
0.5
1
1.5
2
2.5
3 1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
2022
India
share
in
world
export
(%)
Year
Agriculture export
Total Export
• Agri share in
world agri export
below 1% till 1994.
Now 2.35%.
• Total export share
1.81%
• Agri doing better
than non agri in
world export

12. POLICY RELATED
CHALLENGES
12

13. Terms of Trade for Agriculture. Base 2011-12=100
13
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
140.0
1970-71
1972-73
1974-75
1976-77
1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2010-11
2012-13
2014-15
2016-17
2018-19
2020-21
Terms
of
trade
for
agriculture
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Decade Ending Annual Growth Rate Agri %
Growth drivers:
• 1971-1990
• After 2005,
Steep rise in TOT after
2005 set a dangerous
trend for sustaining
growth - necessitate
raise in price to
enhance productivity
Role of technology in
lowering cost and
prices not visible in
recent years.
Production tech and
logistics

14. Structural Change in
Output and Employment
14
• Shift of workers
from agriculture
very slow.
• Increased income
disparities.
• Recently
changed (but
data source
different)
• Implications for
development
policy
Source:
National Income: National Accounts Statistics
Workforce: Census till 2010-11. PLFS for 2020-21
Year
Agri. share
in
workforce
%
Agri. share in national
income %
Ratio of
income:
agriculture to
non agri.
worker
At constant
prices
At current
prices
1950-51 69.2 61.7 53.2 0.51
1970-71 69.7 49.6 43.1 0.33
1990-91 59.0 35.1 29.8 0.29
2010-11 54.6 18.3 18.4 0.19
PLFS data
2017-18 44.1 15.3 18.3 0.28
2022-23 45.8 14.4 18.0 0.26

15. Labour Market Challenges and
Achievements
Particulars 2017-18 2022-23
Annual growth
rate (%)
Labourforce (Million)
Total 483.5 585.9 3.92
Female 112.0 186.2 10.70
Male 371.4 399.7 1.48
Workforce (Million)
Total 454.6 567.5 4.54
Agriculture 200.5 259.6 5.30
Manufacturing 55.1 64.8 3.28
Services 141.3 164.3 3.06
Female LFPR % 23.3 37.0
15
Source: PLFS data.
Strong demographic
transition with close to
4% g r in labourforce.
Turnaround in female
labour force
participation rate.
Emp growth in mfg.
slower than labour-
force.
Rise in share of
workers in agriculture.
Mainly female and
cultivators.

16. Subsidies and Investments in
Agriculture TE 2019-20
16
• Subsidies do not
include Output price
support and direct
payments like
PMKISAN.
• Power subsidy as well
as fertilizer subsidy
exceed public
investments
• More than 80% agri
subsidies go to crop
sector.
• Share of power
subsidies in total
subsidies increased
from less than 15% to
above 36% in last 10
years.
Particulars RS. Crore As % of GVA
Agri & allied
Public Investment 73905 2.40
Input and power
subsidies
207011 6.73
Power subsidy 75150 2.44

17. Power of MSP v/s Demand Led
Growth
17
• Two clear pattern
• Govt support and
growth
• Market, demand driven
growth
• Consequences of rising
policy support for Rice-
wheat
• Retarding growth
prospects by checking
area shift to HVC
• Market distortions
• High policy support and
R&D for cereals not able to
maintain their share
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Fish Livestock Fruits
and Veg
Pulses Wheat
and Rice
Other
cereals
Oilseeds
8.22
5.64
3.38
5.81
1.62
2.21
2.08
Annual Growth rate: 2011-12 to 2020-21

18. Fiscal Burden Getting Heavier
• Price support through procurement costs 20-
40% of MSP. Sale realization is often at MSP.
• Prices of major fertilizer frozen for long.
Subsidy (%) content rising.
• Free or subsidized water and power supply.
• Credit, insurance, farm machinery, seed
• Some subsidies given to farmers not counted
in agri sector
• Direct income support for farmers from Centre
and states – without any cut in subsidy
18

19. Other Challenges
• Reforms in agriculture sector almost stalled
• Share of private corporate sector in total
investments in (production) agri below 0.5%
• Small and fragmented holdings: Scale
– Need for custom hiring
• Legal issues in land lease in and lease out
• Sustainability, environment, ecology
19

20. Role for Agriculture in India’s
Future Growth Story
20

21. Arthur Lewis Hypothesis Losing
its Relevance?
21
3.21
4.30
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7.50
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Share of agriculture in World GDP %
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1991 2001 2011 2021
Share of Agri in total GVA and
Workforce, India
GDP Labour
• Agri share in World GDP on rising trajectory since the onset of
global financial crisis!
• Workforce shift from agriculture very slow.
• Rather than converging, two share moving parallel

22. Renewed Importance of Agriculture
• Experience of 21st Century is turning out to be
different. Industry 4.0 deploy labour saving strategy
and technology. Falling short both on growth and
jobs, esp in emerging economies.
• Can agriculture be another engine of economic
growth?
– Global trends support this (next slide)
– Demand side factors support this
• Demand beyond food, feed and fibre
• Alternative to chemicals and synthetics. Preference towards Bio’s
• Healthy lives hinges on healthy food system
• Big factor for sustainability, green growth
22

23. Demand and Supply Prospects
23
Ramesh Chand
Demand and Supply Scenario
Towards 2047
Growth rate in: Estimate
Population 0.85
Per capita expenditure 5.00
Income elasticity of food 0.45-0.40
Aggregate demand 2.85
Growth rate in Output:
a. BAU – Last 25 years 3.15
b. Recent trend 3.8
c. Downside scenario 2.5
Surplus as % of incremental output
a. BAU scenario 9.5
b. Recent trend 25.0
c. Downside scenario Net export
falls
• Currently India export 8.5% of
domestic output and import
equal to 5.7 % of output
• Likely to remain net exporters in
the medium term in all scenarios
• Even if growth falls to 2.5%,
India remains net exporter till
2030.
• With current growth in domestic
output, India will need to find
market for one fourth of
incremental output - Overseas
or alternate uses.
• Scenario for Amrit Kaal
• Competitiveness. Surplus mgt.
Growth target for Amrit Kaal:
• 4%. Not all quantitative
• One third for qualitative traits

24. Sources of Growth
1. Low hanging fruits
 Yield gaps; very low livestock productivity
 Diversification – HVC (4-5 times yield)
 Harness irrigation potential (double yield)
 Fallow land and Culturable wastes 38 mh. Can
raise NSA by 30%
 If not crops, trees. Recent FCA
2. Technology and innovations
 Conventional and disruptive
3. Policy and institutional reforms
4. New opportunities. Energy, Bios, Health food
5. Demographic advantage
24
Ramesh Chand

25. Reimagine Agriculture for Amrit Kaal
• India share in global output by 2047 with 4% gr: 20-25%.
• World power in many products. Require paradigm shift:
– Costly growth to efficient growth
– Traditional supply chains to modern supply chains.
– Go beyond Local to global value chains
– Inward looking agri to export oriented agri
• New market models: price taker to price setters.
– Option trading, ONDC, Contract faming
• Sarkaari utpadan v/s Bazaari utpadan
• Bulk marketing to branded products
• Production for target consumers
• Small holders as part time farmers
• Climate and sustainability implications of agro –chemical
based farming – alternative path – more agri centric
25
Ramesh Chand

26. Thank you!
26

27. 2. Policy and Institutional Reforms
• Market imperfections (more than half MS outside)
– Logistics costs. Transactions. Excessive intermediation
– Integration: spatial and temporal
– Premium for quality attributes - Assaying
– Digitalization. ONDC platform
• Land Lease, Contract farming
• Corporate engagement in production agriculture.
– Market for inputs to partnership with farmers
– Jain Irrigation in Banana Revolution in Jalgaon (TISS Study).
– ITC agribusiness initiatives, ITCMAARS, Mahindra Agri-business, Godrej
Agrovet and many others……..Need many more and much more
• Farmers collectives
• Agri startups
• Linking with global value chains
• FDI in food processing
27
Ramesh Chand

28. 3. Technology and Innovations
• Traditional, Modern, Frontier
– Fascinating and transformative changes in
advance labs. Next gen crop varieties
• Agricultural and non agri sciences
– Collaborations
• Public and private sector technology
• Digital tools and infrastructure
• Making R&D stronger, vibrant and global level
28
Ramesh Chand

29. Conclusion
• India’s agriculture is poised to grow at 4% in
medium term and beyond. This shows crucial
role of agriculture to attain 9% growth of
economy during Amrit Kaal
• Special focus on agriculture is also necessitated
for employment
• These accord special place to agriculture
– To make India Developed Nation by 2047
– To make India World Power in Food and Agriculture
• These goals are attainable, if we recognise
possibilities in agriculture and work to harness
them.
29

30. 4. New Opportunities
• Waste to wealth and circular economy
– Agri biomass based energy plants
– Punjab leading in paddy biomass based ep
• Food as health care (nutrition, vitality,
immunity, therapeutic uses)
• Shifting preference towards Bios. Synthetics to
naturals. Plant based medicines, therapies,
nutraceuticals, cosmetics, disinfectant,
pesticides, and range of other products.
• Farms as suppliers of processed produce
30
Ramesh Chand

31. 5. Balancing Agro Chemicals based
Farming and Natural Farming
31
Ramesh Chand, NITI Aayog
• Preference and public opinion turning against
agro-chemicals
• Tradeoffs: Productivity and Growth v/s
Sustainability and safety. Affordability
• Maintain a balance between ecological and
economic goals
• Would need a clear roadmap and strategy
• Likely scenario