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Irrigation system has long been a problem area in India. Indian
agriculture is dependent on vagaries of monsoon. Unfortunately less than
50% of net sown area in India is under irrigation. This goes to show
the plight of the agriculture system in India.
- Agriculture still remains the sector that continues to generate maximum employment. For such an important sector to be highly inefficient does not augur well for teh economy.
- Investors can expect several measures in the Union budget 2017-18 to boost irrigation and agriculture sector.
- In the previous budget the government had allocated Rs 20,000 cr to the sector. Government had created a long term fund of Rs 20000 cr in NABARD.
- Government in the current budget may increase the funds allocated to the sector.
- The other problems faced by the agriculture sector are the small size of holdings. At present medium and large holdings account for less than 5% of the aggregate land even though they comprise 1/3rd of the total area.
- Fragmented area or holdings have been impacting the agriculture sector productivity. This has led to agriculture sector contributing only 16% to the India's GDP even though 60% of India's population is dependent on the sector.
- Stocks that are exposed to the agriculture sector will be in focus expecting some big bang announcement in the budget for the agriculture sector.
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