India's agriculture sector has shown impressive resilience, achieving an average annual growth rate of 5% from FY17 to FY23, according to the Economic Survey 2024-25 presented in Parliament by Union Finance Minister Nirmala Sitharaman on January 31, 2025. The sector remains a crucial pillar of the Indian economy, contributing significantly to national income and employment. Despite challenges, it recorded a 3.5% growth in the second quarter of FY25.
Sustained Growth and Economic Contribution
The Economic Survey highlights the critical role of agriculture and allied activities in India’s economy. The sector contributed 20% to the Gross Value Added (GVA) in recent years, significantly supporting national income and employment. In the second quarter of FY25, the agriculture sector registered a growth rate of 3.5%. Additionally, the Gross Value Added (GVA) in agriculture and allied sectors improved from 24.38% in FY15 to 30.23% by FY23.
Kharif foodgrain production in 2024 is projected to reach 1,647.05 Lakh Metric Tonnes (LMT), an increase of 89.37 LMT from the previous year. Moreover, agricultural income has seen an annual increase of 5.23% over the past decade.
Government Initiatives Driving Growth
The government has implemented several initiatives aligned with the Doubling Farmers' Income (DFI) Report 2016, aimed at improving productivity and diversifying crops. Programs such as Per Drop More Crop (PDMC) under the National Mission on Sustainable Agriculture (NMSA) focus on water efficiency and organic farming. Digital innovations like the Digital Agriculture Mission and e-NAM (National Agriculture Market) have enhanced price discovery and access to technology. Additionally, schemes such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provide direct financial support to farmers.
Minimum Support Price (MSP) Hike
A key measure to ensure farmer welfare has been the increase in the Minimum Support Price (MSP). The government has set MSP at least 1.5 times the weighted average cost of production for various crops. For FY25, significant MSP hikes include:
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Arhar: Up by 59%.
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Bajra: Increased by 77%.
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Masur: Raised by 89%.
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Rapeseed: Witnessed a 98% increase.
Irrigation Development for Water Security
The government continues to prioritize irrigation and water conservation. Under the PDMC scheme, financial assistance covers 55% of costs for small and marginal farmers and 45% for others. From FY16 to FY25, Rs. 21,968.75 crore has been allocated, covering 95.58 lakh hectares, a 104.67% increase over pre-PDMC levels. Additionally, the Micro Irrigation Fund (MIF) provides states with loans at a 2% interest subsidy to promote water-efficient irrigation projects.
Livestock and Fisheries Sector
The livestock sector has become a major contributor to agriculture growth, accounting for 5.5% of total GVA with a Compound Annual Growth Rate (CAGR) of 12.99%. In FY23, its output value reached Rs 17.25 lakh crore (USD 205.81 billion). The milk industry alone generated Rs 11.16 lakh crore (USD 133.16 billion). Government initiatives such as the Rashtriya Gokul Mission and the Livestock Health and Disease Control Program have strengthened this sector, with 38,736 AI technicians (MAITRIs) trained to improve breeding practices.
Similarly, the fisheries sector has seen substantial growth through initiatives like the Pradhan Mantri Matsya Sampada Yojana (PMMSY) and the Fisheries and Aquaculture Infrastructure Development Fund (FIDF). Total fish production surged to 184.02 lakh tonnes in FY23, while seafood exports grew by 29.7% to Rs. 60,523.89 crore in FY24.
Floriculture and Horticulture
Floriculture has emerged as a high-growth sector, with exports increasing by 14.55% in April-October FY25 compared to the previous year. The horticulture sector, particularly grape production, is also thriving. India exported fresh grapes worth Rs. 3,460.70 crore in FY24, with Maharashtra leading production at 67% of total output.
Food Processing and Management Boosting Rural Economy
The food processing industry has played a crucial role in value addition and rural employment. Agri-food exports, including processed foods, reached USD 46.44 billion in FY24. The Pradhan Mantri Kisan Sampada Yojana (PMKSY) has successfully completed 1,079 projects, supporting food processing businesses. Additionally, the Production Linked Incentive Scheme for Food Processing (PLISFPI) has led to investments worth Rs. 8,910 crore.
To streamline food distribution, the government is implementing One Nation, One Ration Card (ONORC) and aims for 100% e-KYC compliance. Farmers also benefit from post-harvest credit support through the Credit Guarantee Scheme for e-NWR-based Pledge Financing (CGS-NPF), which provides loans against electronic warehouse receipts.
