Economic survey 2025 calls for policy reforms to boost agricultural growth and sustainability

The economic survey 2025 released on Friday stressed the need to encourage farmers to shift away from overproduced crops that deplete water resources and consume excessive electricity, adding that these reforms will help enhance land and labor productivity in the agriculture sector.
"They need the right policies that nudge them away from impairing their soil fertility with an unbalanced application of fertilisers and from producing already overproduced crops, which deplete India's water resources and use up electricity excessively," said the survey.
It emphasised that Indian farmers should have access to unrestricted market price signals while ensuring mechanisms are in place to shield deserving households from cost-of-living impacts for limited periods.
The survey highlighted that farmers require proper market mechanisms to hedge their price risks. Additionally, there is a need for policies that encourage them to move away from practices that harm soil fertility due to unbalanced fertilizer use.
The economic survey emphasized the need for proper market mechanisms to help farmers in hedging price risks. It also called for policies that promote a shift away from practices that damage soil fertility due to unbalanced use of fertilizers.
According to it, maintaining a stable agricultural growth rate of around 5 per cent and a 20 per cent share in India's gross value added (GVA) could contribute 1 per cent growth to GVA which would help absorb surplus labor while boosting output per worker and per hectare.
The document forecasted further expansion of agro-based entrepreneurship, enabling India to achieve self-sufficiency in food security while also contributing to global food supply.
While various initiatives have supported the growth of India's agriculture and allied services despite challenges, the good news is that there is still considerable untapped growth potential. Implementing the right policies at all levels of government can help reduce the overproduction of cereals and tackle the underproduction of pulses and edible oil.
The survey also noted that the 'agriculture and allied activities' sector currently contributes around 16 per cent to India's GDP for the financial year 2023-24 (provisional estimates) at current prices, emphasizing that with the implementation of the right policies, the sector offers vast and limitless potential for growth and development.