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Agriculture May Well Be Modi's Achilles Heel

BUSINESS ECONOMICS

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June 16-30, 2019

Narendra Modi may have successfully steered his National Democratic Alliance (NDA) to a thumping victory in the recently concluded parliamentary election in India but he still needs to deliver on the agrarian front.

- Saptarshi Deb

Agriculture May Well Be Modi's Achilles Heel

The ongoing agrarian crisis in India found little mention in the BJP's election campaign. However, the massive mandate that has gone in favour of Modi brings a surge in expectations from the country’s electorate of which a sizeable number are farmers.

The new government cannot simply wish away the drought situation that is presently prevailing in around 40% of the country. It has to intervene decisively to mitigate this crisis. As of 2018, less than 50% of the net sown area in India has access to irrigation. The rest is left to the vagaries of nature. The government must look to increase the scope of irrigation in India and increase the reach of micro-irrigation.

Additionally, the government must ensure price rectification for agriculturists. Low prices for most crops in the last four years were caused by demonetisation and by the global downturn of prices. Private trade is reluctant to stock commodities as it sees little chance of rise in prices. In 2018-19, as a result of drought, India had to import cotton and maize. In the present fiscal, if the weather turns hostile, there might be the need to import other agrarian products, which may be linked to an increase in prices of pulses and other necessary food items.

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