Articles by Ramesh Chand

The transition in the rural economy in the last four decades is examined based on the analysis of growth and composition of output and employment. A reduction in the share of agriculture, and a dominance of non-farm activities in the rural economy is noted from 2004–05 onwards. However, agriculture continues to be the predominant source of employment. Employment in the construction sector increased substantially, but was not large enough to absorb workers leaving agriculture, resulting in a decline in rural employment after 2004–05. A serious imbalance has emerged in output and employment in different sectors in rural areas requiring urgent attention to create jobs in manufacturing, services, and construction. Creation of jobs in rural areas requires a complete rethink of rural industrialisation.

The common and strongly-held view in India is that balanced fertiliser use requires three major plant nutrients, namely, nitrogen, phosphorous and potassium, to be used in the ratio of 4:2:1, and any deviation in fertiliser use from this norm would constrain growth in crop productivity. This officially-accepted perception, a product of 1950s experiments, has led to wrong policies on fertilisers. Estimating actual and normative quantity of N, P and K for each state of India corresponding to the current cropping pattern, it is found that contrary to the notion that there is excess use of nitrogen in India, 12 major states were found using less than the required level. India, in fact, faces large deficits in use of P and K. It calls for curtailing the use of N in one-third of the states and raising it in the remaining two-thirds.

The agriculture sector has grown rapidly in the past decade but this has been on the back of rising real prices and not productivity growth. Budget 2014 made a large number of announcements on new schemes and new policies to address the immediate and longterm challenges. An assessment of the budget initiatives.

Agricultural marketing in India suffers from inefficiency, a disconnect between the prices received by producers and the prices paid by consumers, fragmented marketing channels, poor infrastructure and policy distortions. Urgent reforms are needed to address these inadequacies and check the excesses of middlemen. While encouraging new models that improve the bargaining power of producers and scaling up successful experiments, producers' companies and cooperative marketing societies could be promoted to provide alternative avenues for sale of produce. Meanwhile, price policy has to be reoriented to bring it in tune with the emerging demand and supply of various crops. Though the private sector is vital to improving efficiency, the public sector is equally essential to serve the larger social goal of maintaining price stability through market operations.

The main reason for the continued low use of quality seed has been inadequate access. Though the private sector has taken a lead in harnessing technological innovation in some segments, it has concentrated on particular types of seed. It has also occasionally supplied spurious and low quality seeds and charged exorbitant prices. There is, thus, a strong need to promote competition, strengthen the role of the public sector and encourage investment in seed production. The provisions of the new seeds bill and its early enactment are critical for moving agriculture to a new growth trajectory.