Experts say reversal will hamper modernisation
THE Indian government said reform of the agriculture sector, which accounts for about 15 per cent of the $2.7 trillion (£2tn) economy, would have meant new opportunities and better prices for farmers.
However, Modi’s capitulation leaves unresolved a complex system of farm subsidies and price supports that critics say the government cannot afford. It could also raise questions for investors about how economic reforms risk being undermined by political pressures.
Protesting farmers are now calling for minimum support prices for all of their crops, not just rice and wheat, a new demand that has gained traction among farmers across the country.
Some agriculture experts said Modi’s reversal was unfortunate because the reforms would have brought new technology and investment. “It’s a blow to India’s agriculture,” said Sandip Das, a New Delhi-based researcher and agricultural policy analyst. “The laws would have helped attract investment in agricultural and food processing – two sectors that need a lot of money for modernisation.”
The Confederation of Indian Industry (CII), a group that represents top corporations, had pinned hopes on the laws to pave the way for modernising India’s decrepit post-harvest infrastructure. Also, the $34 billion domestic food processing sector would have grown exponentially, thanks to the laws, according to CII.
Another body, the Federation of Indian Chambers of Commerce and Industry, late last year said the laws should spur startups, and technological interventions would help cut wastage and bring efficiency in the agriculture sector. Global and Indian venture capitals have already started funding agritech startups, experts say.