India: Priorities for Agriculture and Rural Development

BACKGROUND

Although agriculture in India, Avenue of Stars of GDP only 21% of contribution, its importance in the country, economic, social and political structure of the Avenue of Stars, but still exceeds the target. Still at home in the rural areas of India 72, Avenue of Stars in the percentage of 1.1 billion people, a large number of people are poor. Poor depend on rain - fed rural agriculture and their livelihoods from the forest most vulnerable food production in India, 20 th Century Green Revolution era, 70 to enable the country achieve self - sufficiency in food crops and avoid the threat of famine in the rapid growth Avenue of Stars.

Low bureaucratic accountability and inefficient use of public funds.

Despite the large expenditure in rural development, inefficient use of public money and less accountability, their impact on poverty, with an upper limit of centralized bureaucracy. In 1992, India amended its constitution to democratically elected local government to rural villages under three levels of governments create. However, power, money transfer, and these local bodies is going slowly activists, in part because of political vested interests. Programs for poor peoples right to shape or contribute to the local governments are not hold accountable.

20 th century, 70 years in labor intensive agricultural growth in rural areas, the decline in food prices and rural poverty reduction coupled with increased demand for rural labor force of 80 years to see durable, but very slow, in the 20th century, 90 years agricultural growth and rural poverty reduction in 1999/00 was 26.3%. But since then, agricultural growth slowdown has become a major concern. India, Avenue of Stars in rice production in China, and Vietnam and Indonesia on the Avenue of Stars, the third in the half. With sugarcane, potato and tea, the same applies to most other agricultural products.

Government of India attaches great importance poverty reduction and agricultural productivity, increase a top priority. However, decision makers adventure, we turn our attention from the current subsidies - should be based on system is not sustainable, one skilled in the order, is to create internationally competitive agricultural sector and a solid foundation for diversity.

ISSUES AND CHALLENGES

Slow Down in Agricultural and Rural Non-Farm Growth:

Both well as poor as more 'prosperous Punjab, Haryana and Uttar Pradesh states recently a Green Revolution slow down agricultural growth rate has been observed. Some of the revival of growth factors are an obstacle:

• Poor composition of public expenditures:

Productivity of public spending on agricultural subsidies that agricultural research and extension, rural infrastructure investments as well as increase investment in the form of, and crowd out health and education of rural people. In 1999/2000, the agricultural subsidies amount to 3 percent of GDP and 7 times more public investment in the sector.

• Over-regulation of domestic agricultural trade:

Although economic and trade reforms in the 1990s helped to improve incentive structures, high costs have increased regulation of domestic trade, price risk and uncertainty, sector less competitive.

• Government interventions in labor, land, and credit markets:

More rapid growth in rural non-agricultural sector for government intervention in factor markets - labor, is limited by land and credit - and production markets, such enterprises as small reservations.

Inadequate infrastructure and services in rural areas.

Weak Framework for Sustainable Water Management and Irrigation:

• Inequitable allocation of water:

Several states have incentives, policy, regulatory and water scarcity, sustainable peace, and institutional framework for equal allocation.

• Deteriorating irrigation infrastructure:

Public expenditure is spread over several unfinished projects in irrigation. Moreover, as the existing infrastructure has rapidly deteriorated and maintenance work are given low priority.

Inadequate Access to Land and Finance:

• Stringent land regulations discourage rural investments:

While land distribution is low, are skewed land policy and tenure rules (restrictions or renting land or other uses, including a ban on transferring security increase) the use of landless and discouraging rural investments to reduce unexpected effects has had.

• Computerization of land records has brought to light institutional weaknesses:

State government initiatives and increased transaction costs to computerize land records have reduced transparency, but also the institutional weakness that has brought light.

• Rural poor have little access to credit:

Although India has an extensive network of rural financial institutions, many poor rural areas, remain excluded due to formal financial institutions are inefficiencies, weak regulatory framework, high transaction costs and risks associated with lending to agriculture.

Weak Natural Resources Management:

One quarter of India’s population depends on forests for at least part of their livelihoods.

• Protection of forests from a purely ineffective approach:

India experience shows that a complete protection of natural resources management approach does not work effectively to reduce poverty and little.

• Forest resources for poor communities the right of:

weak resource rights and community forest areas, an inefficient legal framework for the management of and participation is faced with economic incentives and market access for the poor.

Weak delivery of basic services in rural areas:

• Low bureaucratic accountability and inefficient use of public funds:

Despite the large expenditure in rural development, inefficient use of public money and less accountability, their impact on poverty, with an upper limit of centralized bureaucracy. In 1992, India amended its constitution to democratically elected local government to rural villages under three levels of governments create. However, power, money transfer, and these local bodies is going slowly activists, in part because of political vested interests. Programs for poor peoples right to shape or contribute to the local governments are not hold accountable.

PRIORITY AREAS FOR THE WORLD BANK SUPPORT

1. Enhancing agricultural productivity, competitiveness, and rural growth:
Enhancing productivity:

Create more productive, internationally competitive and diversified agricultural sector to increase the productivity of public investment in expenditure away from subsidies will need to change. Second, the need to remove restrictions on domestic private business to improve the investment environment and market opportunities are expanding. Third, agricultural research and extension system needs to use technology to improve productivity must increase to strengthen. Across India with focus on various circumstances cold states the importance of strategy shows a strong regional bias.

• Improving Water Resource and Irrigation/Drainage Management:

For the increase in multi-regional competition for water service to irrigation water policies and water resources management unbundle highlights the need to prepare. Other key priorities include: (i) modernizing irrigation and drainage departments and other agencies, participation of farmers in irrigation management, integrated, (ii) improve cost recovery; (iii) the highest returns with rationalizing public expenditure plans with priority for completion, and (iv) operation and maintenance of stability of investment allocated sufficient resources.

• Strengthening rural non-farm sector growth:

Growing domestic and global market value is more income, which for high value products open new opportunities for agricultural diversification in the demand for fresh and processed agricultural products are fueling (eg horticulture, livestock), agricultural processing and related services. Government and private sector participation and for direct interference competition to create a conducive environment needs to change its role from overregulation and broadly agribusiness, rural non-farm sector has increased. Includes improving the rural investment climate control removal business, labor regulations and tax system price (including the adoption of rationalizing the tax system), and access to credit and improving key infrastructure (roads, electricity, ports, markets like).

2. Improving access to assets and sustainable natural resource use:

• Balancing poverty reduction and conservation priorities:

Conservation and poverty reduction in the search for winning combinations win for sustainable natural resource management will be crucial. The policy and institutional barriers to addressing the legal rights involved devolving resources and responsibilities transferred to local communities.

• Improving access to land:

States for the growing consensus, land reform policy, particularly land tenancy policy and land administration system can create. That tenancy restrictions in this regard, useful lessons can offer. During long term, a more holistic approach to governance policies, rules and institutions in the country to ensure security of tenure to reduce costs, and religion is necessary to ensure stability and order.

• Improving access to rural finance:

Regional rural banks and by increasing the regulatory supervision of rural credit cooperatives need to improve the performance, government control and ownership is clear, and debt collection and use of land as collateral for strengthening the legal framework. The micro finance institutions in rural areas for the development will include creating a conducive environment.

3. Strengthening institutions for the poor and promoting rural livelihood:

• Promoting Community-Based Rural Development:

State Governments efforts in scaling the livelihood and community driven development approach will be important to build social capital in the poorest regions as well as to expand savings mobilization to promote productive investment, income generating opportunities and sustainable natural resource management. Direct self help support groups, village committees, user associations, savings and credit groups and others initial push access to higher levels and new economic opportunities for action can offer organizations. In addition, social mobilization and empowerment, especially women's groups for collective action through increased capacity, providing communities with greater voice "and the private sector, markets and bargaining power in dealing with financial services.

• Strengthening Accountability for Service Delivery:

As decentralization and local governments continued efforts to provide basic service is given more importance, the establishment of accountability mechanisms is important. Budget and planning capacity of local governments through participation to identify local priorities and needs strengthening. This, in turn, improve the rural investment climate, would facilitate private sector participation, employment opportunities and create linkages between agriculture and non agriculture sectors.