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LATEST NEWS UPDATES | How realistic are promises of doubling farm incomes? -Roshan Kishore

How realistic are promises of doubling farm incomes? -Roshan Kishore

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published Published on Mar 7, 2016   modified Modified on Mar 7, 2016
-Livemint.com

A useful way to judge the feasibility of Arun Jaitley’s targets can be to look at how such indicators have behaved in the past

While announcing an increase in rural spending, finance minister Arun Jaitley also set himself a target of doubling “the income of farmers by 2022” in this year’s budget. Laudable as the ambition is, how achievable is it?

First, there is the question of nominal versus real increase in incomes. While economists might tend to value only the latter, people do value even a nominal increase in incomes. Second, given the lack of actual income data in India, there is also the question of which indicator should be taken as a measure of farmers’ income. A useful way to judge the feasibility of Jaitley’s targets can be to look at how such indicators have behaved in the past.

One measure of farmer income can be value added per worker in agriculture. In India’s case, this figure can be calculated by dividing value added in agriculture by the number of workers in agriculture.

In constant price (real) terms value, added per worker in agriculture increased 1.8 times between 1980-81 and 2010-11. In current price terms, this figure has increased by more than 28 times between 1980-81 and 2014-15. Also, value added per worker at current price has doubled between various points in history, the most recent being between 2003-04 and 2009-10.

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Livemint.com, 7 March, 2016, http://www.livemint.com/Opinion/DgddwedJrDYlereydhLB0O/How-realistic-are-promises-of-doubling-farm-incomes.html


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