New Delhi | The pre-budget document for the 2024-25 fiscal has suggested policy reforms to discourage overproduction of cereals while boosting output of pulses and edible oils, which the country currently imports to meet domestic shortages.
The Economic Survey 2024-25, tabled in Parliament on Friday, stressed that India's agriculture sector has "significant untapped growth potential" despite various growth initiatives.
Farmers must be allowed to receive unimpeded price signals from the market, with separate mechanisms to protect vulnerable households, it added.
The document outlined three key policy shifts needed - establishing market mechanisms for price risk hedging, preventing excessive fertiliser use, and discouraging production of water and power-intensive crops that are already in surplus.
"These policy shifts will help lift agricultural productivity in the economy by boosting land and labour productivity in the sector," the survey said.
Agriculture sector growth averaged 5 per cent annually during FY17-FY23, showing resilience despite challenges.
In Q2 FY25, the sector grew 3.5 per cent, recovering from growth rates of 0.4-2.0 per cent in the previous four quarters.
The sector contributes approximately 16 per cent to GDP and supports about 46.1 per cent of the population, as per FY24 provisional estimates at current prices.
The document emphasized the growing importance of allied sectors like animal husbandry, dairying and fisheries for income diversification.
However, it flagged challenges like climate change and water scarcity that require targeted interventions.
Digital technology adoption and improved market infrastructure through platforms like e-NAM were highlighted as critical focus areas.
Government schemes have shown a positive impact, with over 11 crore farmers benefiting from PM-KISAN and 23.61 lakh farmers enrolling under the PMKMY pension scheme as of October 31, 2024.
The report also stressed the need for private sector investment to support small farmers and modernise food grain storage systems, particularly in remote and hilly areas.