Economics of the Indian farm sector have been weakening since then, and have worsened sharply over the past three years. And, the fact that demand for farm loan waivers resurfaced every 5-10 years is indicative of a structural malaise. IMF’s real food price index (deflated by manufacture price index) has declined ~30 since 2011 due to steeper decline in food prices. Notwithstanding the recent slowdown at 13% in FY17, banks’ agri lending was much higher than overall lending growth of 5%. Decentralization of industries and a financially viable farm sector hold promise for a sustainable rural economic model.

Source: Economic Times July 01, 2017 06:52 UTC