Farmers' income has more than doubled during Modi years, shows new paper

Study by a NITI Aayog member reveals income jumped 126% between 2014-15 and 2023-24, surpassing the target set by the Modi government

Did farmers’ income actually double, as targeted, in more than 10 years of the Narendra Modi government? It did, according to an analysis by NITI Aayog Member Ramesh Chand.

 

The analysis, published in a chapter titled “Agriculture in Meeting the Aspirations of Rising India”, in the latest Quarterly Journal of the Indian Association of Social Science Institutions, has shown between 2014-15 and 2023-24, which coincides with this government’s tenure, farm producers’ income, grew more than 10 per cent annually.

 

“This means that farm producers’ income has grown not only at a pace higher than manufacturing and the rest of the economy, but has jumped 126 per cent over the decade, which is 26 per cent more than the ‘Doubling of Farmers’ Income’ target,” Chand said in the paper.

 

The findings have come amid a growing challenge that agriculture faces from dipping nominal growth and a threat of another El Nino year in 2026.

 

Study findings and publication

 

The government had set a target of doubling farmers’ income by 2022-23 over the base of 2015-16. The paper’s analysis has shown that in the above-mentioned seven-year period, producers’ income in agriculture and allied sectors increased by 107 per cent in crop-plus-livestock sectors.

 

“… when allied activities such as fishery and forestry are excluded, the growth in producers’ income from agriculture remains almost the same,” the paper noted. Which is around 108 per cent, it said.

 

How farmers’ income was calculated

 

Producers’ income was calculated by deducting three items from gross value added in agriculture and allied activities. Gross value added in agriculture and allied sectors is a measure of income of the sector that gets distributed over labour, capital, and producers, Chand said.

 

The items deducted are estimates of the consumption of capital, compensation to employees, and taxes.

 

Subsidies to the sector, according to the National Accounts Statistics (NAS) of 2025, were then added to the resulting figure to arrive at the final number.

 

“This income is termed as operating surplus or mixed income in NAS publications and the data and information are reported at current prices,” Chand said in the paper.

 

Agriculture outpaces manufacturing and broad economy

 

Chand compared the income received by farmers with that from manufacturing as well as the broad economy during the period from 2014-15 to 2023-24 to conclude that while the income of agriculture producers rose around 10.11 per cent per year in that period, that from manufacturing grew 8.02 per cent and that of the overall economy by 9.38 per cent.

 

The analysis noted that though producer's income is also available seperately for households, public sector and corporate sector but corporate and public sector account for tiny share of income of agriculture.

 

“The results clearly show that the 10 years have been quite favourable for Indian agriculture,” Chand said.

 

Key insights from the analysis

 

He said that his analysis threw up some important points, the first among which was that income for agricultural producers increased at a rate faster than that of agriculture labourers.

 

Second, income for agriculture producers increased at a higher rate than the value of agricultural produce, which is possible only if the cost of production increased at a lower rate than the increase in production. This could be due to a faster increase in output prices than that for input prices or other reasons like the adoption of cost-reducing technology and irrigation, Chand said.

 

Third, the analysis has shown that the income of agriculture producers witnessed a much higher increase during the 10-year period between 2014-15 and 2023-24 than in industry and in the non-agricultural economy.

 

Finally, Chand concluded that the value of the output of the non-agricultural economy increased at a higher rate than the output of agriculture, but the reverse was witnessed in the case of net income.

 

Outlook and emerging challenges

 

Chand’s analysis has shown that the farm sector and farmers’ income may not have passed through a bad phase in the first 10 years of this government, at least when it comes to producers’ income, and the goal of doubling farmers’ income has been met.

 

However, some experts say sustaining this trend is likely to become complex because of the challenge of handling surplus output.

 

According to some estimates, with current domestic and export demand, India faces a 25 per cent surplus in rice, 6-7 per cent in wheat, 15 per cent in maize, 25 per cent in fish, and 4 per cent in milk, while oilseeds and pulses are in deficit.