Allied Sectors of Indian Agriculture Emerging as Promising Sources for Improving Farm Incomes: Economic Survey

TFP Bureau, New Delhi; July 23, 2024: The Economic Survey 2023-24 was presented in Parliament today by Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman. The survey reveals that the allied sectors of Indian agriculture are steadily emerging as robust growth centers and promising sources for improving farm incomes.

From 2014-15 to 2022-23, the livestock sector grew at an impressive Compound Annual Growth Rate (CAGR) of 7.38 percent at constant prices. The contribution of livestock to the total Gross Value Added (GVA) in agriculture and allied sectors increased from 24.32 percent in 2014-15 to 30.38 percent in 2022-23. In 2022-23, the livestock sector contributed 4.66 percent of the total GVA, significantly boosting the per capita availability of milk, eggs, and meat.

The fisheries sector, a crucial contributor to the Indian economy, makes up about 6.72 percent of the agricultural GVA and has grown at a compound annual rate of 8.9 percent between 2014-15 and 2022-23 at constant prices. This “sunrise sector” supports approximately 30 million people, particularly marginalized and vulnerable communities.

The Economic Survey states that the Animal Husbandry Infrastructure Development Fund (AHIDF) facilitates investments from individual entrepreneurs, private companies, Farmer Producer Organizations (FPOs), and Section 8 companies and Dairy Cooperatives. The government provides a 3 percent interest subvention to borrowers and a credit guarantee of up to 25 percent of total borrowing. As of May 2024, 408 projects have been sanctioned by lending banks, NABARD, and NDDB worth ₹13.861 crore, generating 40,000 direct employment opportunities and benefiting more than 42 lakh farmers.

In 2022-23, India achieved a record fish production of 17.54 million tons, ranking third globally and accounting for 8 percent of global production. To bolster this sector, the Pradhan Mantri Matsya Sampada Yojana (PMMSY) aims to enhance seed and fish production and other extension services. To address the sector’s infrastructure needs, the Fisheries and Aquaculture Infrastructure Development Fund (FIDF) was introduced in 2018-19 with a total fund size of ₹7.52 thousand crore. So far, 121 proposals have been recommended for ₹5.59 thousand crore at a concessional rate.

The Economic Survey highlights that the food processing sector has seen significant growth. India is the largest producer of milk and the second-largest producer of fruits, vegetables, and sugar. The food processing industry is one of the largest employers in organized manufacturing, with a 12.02 percent share in total employment in the organized sector. The value of agri-food exports, including processed food exports, during 2022-23 was USD 46.44 billion, accounting for about 11.7 percent of India’s total exports. The share of processed food exports increased from 14.9 percent in 2017-18 to 23.4 percent in 2022-23.

The GVA in the food processing sector has increased from ₹1.30 lakh crore in 2013-14 to ₹1.92 lakh crore in 2022-23, constituting 7.66 percent of GVA in manufacturing in 2022-23 at 2011-12 prices.