What Narendra Modi's new government needs to do for farm sector
Ashok Gulati May 26, 2014
Expand irrigation coverage: In a country where agriculture is an important activity both for food security and employment, only 35-40 per cent irrigation is assured. For the rest we depend on monsoon which is uncertain. The government must spend on expanding irrigation. Money for the same can come from rationalising the food and fertiliser subsidy and bringing down MNREGA expenditure.
Reduce wastages: Inflation is being driven by fruits, vegetables, milk and meat. The supply-side response will take time. But the immediate focus should be to bring down wastages and add to supplies. This can be done by building back-end infrastructure.
Streamline taxes and levies on food grains: The grain procured in states like Punjab attracts high taxes of 14.5 per cent. There is no value addition but the archaic system at mandis results in high taxes. Taxes should be brought down to less than five per cent. Levy on rice millers should be abolished.
As told to Ajay Modi