Government policies have discouraged agriculture by imposing severe restrictions on sale across borders, and on price, for fear of angering the more vocal urban voter. The NREGA scheme is one attempt to redress this; the bigger achievement would be the plan of the Ministry of Roads, Transport and Highways, to spend Rs 3 lac crores on a deeper road network. Because of abysmal roads, more than a third, closer to half, of fruits and vegetables are destroyed in transit. Another cause is fragmented land holdings, due to historical reasons, which denies the use of productivity enhancing mechanized agriculture. The chief statistician of India is quite right in stating that poor growth in agriculture would prevent GDP growth from rising higher than 8%.
Government has made income from agriculture free from tax, for sure, but that is more for the concealment by politicians, bureaucrats and businessmen than by farmers, the overwhelming majority of whom are subsistence farmers.
Straight from the hips, January 23, 2010
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