Economy

The Agriculture Infrastructure in India– Connecting Dots to Paint a Bigger Picture

If agriculture is the lifeblood of the Indian economy, then infrastructure is like the arteries and veins which are necessary for this sector’s and the economy’s sustenance and growth. Infrastructure, mainly physical, in the agriculture sector implies those facilities that help farmers in the processes of sowing to selling; namely- irrigation, road connectivity, electrification, storage and telecommunication. Investment in infrastructure leads to reduced costs per input, enhanced productivity, further income generation and capacity building. It has positive spill-over effects such as the development of rural areas, alleviating hunger and poverty and proper conservation and management of natural resources.

The growth rate of Gross Value Added in the Agriculture and Allied Sector declined from 6.3% in 2016-17 to 2.9% in 2018-19 as per the Economic Survey. Gross Capital Formation in this sector as a share of GVA also declined to 15.2% in 2017-18 from 17.7% in 2013-14. The share of the private sector in total Gross Capital Formation in the Agriculture and Allied sector declined from 88.1% in 2013-14 to 82.7% in 2016-17; whereas the public sector’s investment raised from 11.9% to 17.3% during the same periods respectively. Finance Minister Nirmala Sitharaman, promising to invest heavily in agricultural infrastructure, raised the budgetary allocation to the sector by 75% to Rs.1,51,528 crore in the Union Budget of 2019. The total allocation towards rural development also increased to Rs.1,40,762 crore. Here’s a look at the status of basic infrastructural facilities in India and the dots that are yet to be connected to paint a bigger picture of a brighter India.

Water, water, yet to reach everywhere

The majority of Indian farmers (55%) still depend on rainwater for irrigation. Indian monsoons are erratic, which results in huge losses for the farmers, pushing them into the vicious cycle of debt trap. Investment in irrigation is a must to double farmers’ incomes by 2022.

The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) scheme was launched in July 2015 with the aim of providing every farm with irrigation facilites. The Accelerated Irrigation Benefit Programme prioritizes projects for faster delivery. The Har Khet Ko Pani policy uses minor sources of irrigation to reach each farm. The Per Drop More Crop plan focuses on using water resources efficiently and increasing yield. Watershed development emphasizes on rainwater harvesting and soil and moisture conservation.

Investment in irrigation development has yielded states like Madhya Pradesh with a high agricultural growth rate of 9.7% during 2004-15. It saw an increase in the irrigation ratio from 24% in 2001 to 42.8% in 2015. Demand for water from the agriculture sector in India is the highest i.e. 80%. The world battling a water crisis. Hence, any effort to save water is welcomed. Micro irrigation, a pioneering technology, is an integral part of PMKSY that judiciously uses water resources and manages moisture content in soil. It promises increase in productivity, fertilizer and water efficiency and greater returns to farmers.

Roads: A must for the journey of economic growth

Without connectivity between farms and the market, the whole exercise of production is futile. Farmers need roads to transport seeds, fertilisers, machinery, etc. to their farms and take their output to markets for selling. One of the most successful government run schemes is Pradhan Mantri Gram Sadak Yojana (PMGSY), which was launched in 2000. In the first two phases of PMGSY, 1.25 lakh km of rural roads were constructed. In its third phase, the existing roads will be upgraded and 7000 km of new roads will be built. For this, Ms. Sitharaman has allocated over Rs. 80,000 crores. Around 3,000 km of these will be green roads made out of waste plastic and recycled metal.

Increase in connectivity leads to increased employment opportunities and income generation along with the use of motor vehicles in agriculture. But the challenges include land acquisition, law and order issues, lack of labour and raw material and maintenance of existing network. The way forward would be Public Private Partnership models and scheduling work after monsoons. Gram panchayats should watch over the progress of work.

Electrification: Lighting up lives

Electricity is one of the basic human needs. It is also a very important input in farming. Any technological advancement is redundant without access to electricity. In May 2014, around 18,452 villages were devoid of this basic amenity. The government introduced two landmark schemes for universal electrification- Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) in 2015 and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) in 2017 to provide free electric connections to the underprivileged. DDUGJY is crucial for its feeder separation. It separated agricultural and non-agricultural power supply. Saubhagya was launched to bridge the gaps left by all the previous schemes and provide last mile connectivity. By April 2018, all of the 5,97,464 villages had been electrified.

But here is a catch, a village with at least 10% households with electricity supply is called electrified. The government has hence shifted focus to now universal electrification, ensuring power supply to each and every willing household. Electricity supply has said to reduce crime rates in villages along with helping students in studying. Power supply means better and efficient use of time and technology at the farms. It encourages innovative farming practices. However, challenges like duration and quality of supply and affordability still remain unaddressed. Renewable sources of energy are also incentivised by the government. But to ensure quality transmission, subsidy-driven power distribution needs to give way to a competitive user-based revenue collection model.

Warehousing and Storage: A reservoir of massive growth potential

One of the biggest plights of farmers is to sell their produce out of fear of it getting spoilt due to lack of appropriate storage facilities. Food wastage caused by improper storage could feed one-third of the world’s population, as per a report by the World Bank. Proper storage can increase the shelf life of commodities and also save them from infestations and early rotting. Cold storage technology is highly necessary as a part of post harvesting management of perishables as it increases shelf life and storability of products.

The Indian cold-chain industry is expected to grow at CAGR of 25.8% as per ASSOCHAM report. Around 25 to 40% of total produce is lost post-harvest due to lack of cold storage spaces. Warehousing is an excellent job opportunity for rural India, with a potential for around 20,000 jobs at different levels of specifications and specializations. Rs. 45,000 crores have been invested by the government during 2018-20 to set up warehouses across the country. GST and a rapid growth of e-commerce has catapulted the demand for warehousing.

Telecommunication: Connecting the disconnected

India possesses the second largest internet user base in the world after China. Telephones have percolated to the grassroot levels but internet access is yet to make significant cover in rural India. If faster digital connectivity reaches rural India, then the internet can revolutionize farming in multiple ways. The roadmap and strategies are yet to be finalised for 5G in India but it promises faster connectivity, besides forming the backbone for Internet of Things. This technological boon can be used for tracking livestock movement via GPS sensors and monitoring water levels in the fields. Over the Top services or Third-party applications that use internet, like Skype, are connecting people from different corners of the world. It has been used for teleconferencing and imparting knowledge about new farming practices. Different apps like Kisan Suvidhaa and SmartGaon are used for rural awareness and development. Internet of Things (IoT) builds a network between different devices to communicate with each other and take actions autonomously; thus; using data analytics and technology to remotely control farm activities with precision of computer algorithms. IoT can be used for sustainable land and water resource management, food security, disaster management and public health.

Basic internet facilities are yet to reach rural India. Bharat Net programme aims to connect 2.5 lakh gram panchayats with Opti Fibre Cables to deliver high speed internet. But basic literacy and technical awareness are pre-requisites for the farmers to make full use of internet for their benefit. Rural India is an untapped market with great returns to the industry and farmers both.

The way forward

The policy initiatives taken in the past five years are commendable in their approach, yet a lot has to be achieved in the set target of doubling farmers’ income by 2022. Key challenges for policymakers to ensure effective and inclusive development include time-bound implementation of policies while reducing red tape-ism. There should be timely disbursement of funds for projects. Coordination between different ministries and centre-state governments is a must. It is necessary to create strong literary infrastructure i.e. awareness and education about the policies to ensure that benefits reach the grassroots. Maximum farmer households need to be brought under the formal financial sector by providing quick and easy micro-finance options.

To become a value-adding enterprise from the current vote-bank opportunity, agriculture sector requires heavy private investment in infrastructure to complement initiatives taken by the government so far. Hence, public private investment should be encouraged. Innovative financial instruments are the need of the day to tap into the stock of domestic private investment which are lucrative and secure enough for even the risk averse and conservative investors. This can definitely transform our farmers from ‘annadata’ to ‘urjadata’ as envisioned by the Finance Minister.

Picture Courtesy- Youth ki Awaaz

 



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