Statsguru: Six charts explain the agriculture sector's next decade

India’s agriculture sector was allocated Rs 1.52 trillion in Budget 2024-25 (FY25), an increase of 8.1 per cent from FY24 (revised estimates). The sector accounts for 3.2 per cent of the total government expenditure. It was 4.2 per cent in FY20 (chart 1).

 

In her Budget speech, Union Finance Minister Nirmala Sitharaman announced a review of the agriculture research framework to increase productivity and develop climate-resilient crop varieties. The Department of Agricultural Research and Education has been allocated Rs 9,941.09 crore (chart 2).

 

This comes amidst concerns over India’s agricultural production. The growth in production is projected to decline over the next decade, according to “OECD-FAO Agricultural Outlook 2024-2033”, a report by the Paris-based Organisation for Economic Co-operation and Development (OECD) and the United Nations Food and Agriculture Organisation (FAO) released earlier this month.
 

For example, wheat production, which recorded a 2.6 per cent growth in 2014-2023, is projected to slip to 2.2 per cent in 2024-2033. Growth in maize and rice production, too, are projected to decline.  This is an area of concern, given that consumption is projected to increase over the next decade due to a rise in urban population, the report indicates (charts 3, 4).

 

Consequently, exports of major crops from India, except for rice, are projected to decline over 2024-2033 (chart 5).

 

Food accounts for 35.4 per cent of an Indian household’s expenditure. So, rising food prices remain a challenge for the country. In June, food inflation touched 8.36 per cent – the highest in six months. FAO data shows that over half of India’s population cannot afford a healthy diet. In this aspect, the country ranks worse than lower-middle-income economies (chart 6).