Washington: Though the International Monetary Fund (IMF) has estimated India’s economy to
grow at 7.2 per cent and 7.7 per cent in the current fiscal and 2018-19 respectively, improving
productivity in the agriculture sector remains a key challenge.
The IMF has underscored the need for addressing long-standing structural bottlenecks and
enhancing market efficiency. Liberalising commodity markets and giving farmers more
in the distribution and marketing of their produce will help raise competitiveness, efficiency, and
transparency in state agriculture markets.
“The main challenge before the Indian economy will be to improve agricultural productivity.
Agriculture remains the most labour-intensive sector of the economy and employs around half of
India’s workers. Farmers require more flexibility in distributing and marketing their crops as this
will help improve competitiveness, efficiency, and transparency,” IMF said in its report.
IMF also said input subsidies to farmers should be administered through direct cash transfers
rather than underpricing of agricultural inputs, as such subsidies to the agriculture sector have
had large negative impacts on agricultural output.