Centre plans wider method to measure income of farmers

Hindustan Times

The Narendra Modi government will count on a much wider measure of earnings of a farming household than is captured by agricultural gross domestic product (GDP) while calculating the income of cultivators in 2022-23, the year by which the government has promised to double farmers' incomes, according to a draft proposal reviewed by HT.

In 2016, Prime Minister Modi first declared his government would double farm incomes — in other words, raise them by 100% — in six years by 2022-23, a politically significant goal in a country where nearly half the population depends on a farm-based livelihood.

The target took economists by surprise, given that increasing farm GDP twice over would require an unprecedented rate of farm growth, expressed as 'gross value added', which is, quite simply, GDP minus taxes. GDP, the most widely used measure of income, represents the value of all goods and services produced by an economy.

The target then found a mention in the budget presented that year by the then finance minister Arun Jaitley, which stated: 'Government will, therefore, reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022.'

Not only have farm incomes remained subdued in the past four-five years, the sector's growth is currently way below what is required to achieve a potential doubling of incomes coming out of agricultural activities.

With the target year just three years away, the government has begun crunching the numbers, policy measures and of course finalising a methodology to assess the change in farmers' income.

The government will calculate gross total earnings of a farm household on a base year of 2016-17, and a third of a farm household's income is targeted as coming from non-farm sources, such as rural enterprises, an official familiar with the matter said.

Income transfers, such as the one under the PM-KISAN scheme, which hands out Rs 6,000 annually to landed farming households, will also be included in the income calculation.

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