Agriculture, the largest private sector

The much-awaited annual report of the Reserve Bank of India (RBI) is out. Everyone expected the report to over play the country’s unexpected economic growth, and it did not disappoint on that front. It talks about the economic boom, and its projection for the current fiscal is also positive.

However, the report comes with a rider. The RBI says that only agricultural growth can sustain the high economic growth. Few newspapers took note of this ‘big’ condition. Most just concentrated on the story of economic growth. It seems that growth-oriented economists tend to delink economy from agriculture.

For the benefit of the private business sector, growth oriented economists refuse to acknowledge the importance of agriculture to overall economic growth. This is not because they don’t understand the linkages. Economists do so deliberately to inflate the private sector’s contribution to the overall economic growth.

Indian agriculture suffers from a mental block: agriculture is ‘something’ that is not private and needs to be replaced with other productive activity. While the fact remains that agriculture is the largest private enterprise that contributes the maximum to the economy and employs the maximum people in the country.

All our farms are privately held and people tend to it like they would to any other business. Over a period of time, agriculture and allied activities have been categorised as the unorganised sector while the rest have been put under the organised sector -- a status, which gets them all government facilities.

While formulating policies, the government depends upon the organised sector, as it is small and thus easier to manage. As a result, the so-called unorganised sector, which employs and sustains the maximum number of people, suffers the most, precipitating a poverty crisis.

When the government finally decided to solve the problem, it cannot do anything, as there are hardly any policies to manage the unorganised sector. If the government were to treat agriculture as a primarily private sector, farmers would benefit from the policy supports that it gives to industries or other private businesses.