even though it is a large part of the economy and plays an important role in the product categories of the country. In the midst of the crisis of COVID‐19, rural India is not becoming an issue of central discussion. Rather it should be in the hour of this crisis that rural economy should be discussed the most. At present, the agricultural sector is one such link which can make the Indian economy run smoothly again in the future. The agricultural sector has recorded a historic decline in the last few years. Annual growth rates of agriculture and allied sectors are 1.5, 5.6, −0.2, 0.6% in 2012–2013, 2013–2014, 2014–2015, 2015–2016, 2016–2017, 2017–2018, and 2018–2019 respectively 6.3, 5.0, and 2.9%. According to the report released by the National Statistics Office in January 2020, the estimate of agricultural growth rate in the year 2019–2020 was only 2.8%. If the crisis continues like this, agricultural development may once again be negative. Despite all the government announcements, due to the ongoing crisis of COVID, the market for agricultural products is ending rapidly. The agricultural sector is also witnessing a supply crisis along with demand. The important fact is that at the present time the economy cannot be divided between the rural and the city.
Figure 4.1 Predictive statistical model for the deflation of COVID‐19 spread in India.
The situation caused by the COVID‐19 crisis and extended lockdown period in India severely affects not only the supply but also the demand for agro‐foods (Ceballos et al. 2020; Mahendra Dev 2020). This directly impacts the economy of 140 million Indian farmers and the share of the GDP associated with agriculture, which has similarly declined. In India, the agricultural yields from local farms for Rabi crops, cereals get stored in cold storages and/or are directly supplied to the Indian market. Food touch prices highly o urban market when mostly cereal production cannot get into market and this situation creates very difficult for both poor people as well as for local farmers (Kumar et al. 2020). To mitigate the immediate challenges related to lockdown, the Government of India (GoI) has provided economic aid or relief packages aimed at many different sectors. The economic aid in general has been critically needed but has also inversely impacted the national GDP (see Figure 4.2).
As shown in Figure 4.2, the national GDP was in March 2020 expected to be down about 0.9 trillion USD in value from FY2020‐Q1 (March 2020) to FYP2020‐Q3 (September 2020). A fair part of this drop is expected to be related to the agricultural sector. For comparison, a novel five‐year scheme worth INR 15 000 crores introduced by the GoI aims to strengthen the state and national level systems in order to combat the health impacts of COVID‐19 (Mohan et al. 2020). This fund was further circulated to intensive care units, supply of oxygen cylinders in medical centers, distribution of mask, sanitizer, oxygen generating plants, and many more. State government of India has planned for health system preparedness package into three phases from 2020 to 2024. The growth rate for FY2021 was initially rated by World Band and other rating agencies with the lowest figures in the last three decades since India's economic liberalization in the 1990s began. The economic packages announced by the GoI in the middle of May 2020 did not help and the country's GDP estimates were downgraded even more to negative figures, signaling a deep recession. Consequently, India was expected to lose over ₹32 000 crores (US$4.5 billion) every day during the first 21 days of complete lockdown declared following the COVID‐19 outbreak (The Hindu Business Line 2020). It has been also estimated that lockdown may affect around 53% of enterprises across the country (The Indian Express 2020) severing almost all economic activity (Kumar et al. 2020). However, the GoI initiated several remedial measures beginning with food security and allocating extra funds for healthcare and states, sector related incentives and tax payment deadline extensions. In the very beginning, on 26 March 2020 itself, a number of economic relief measures for the poor were announced totaling over ₹170 000 crore. Reserve Bank of India also announced to make available ₹374 000 crore to the country's financial bounty. Global financial institutions like the World Bank and Asian Development Bank also supported India to tackle the coronavirus pandemic. Moving further, the Prime Minister announced an overall economic package worth ₹20 lakh crore (US$280 billion) constituting the 10% of India's GDP on 12 May 2020 which was further unfolded by the Indian Finance Minister in the next five days. As a final and booster dose to Indian economy, on 12 October 2020, the finance minister announced an economic stimulus package worth ₹46 675 crore which is 0.2% of the GDP.
Figure 4.2 Recent and expected developments in the GDP of India since the fourth quarter (Q4) of the fiscal year 2018 (FY2018). The numbers shown are from the Reserve Bank of India (RBI), accessed 16 May 2020.
4.4 Government of India and Local Government Initiatives
The migration of people back to their native rural communities combined with a decline in market availability for and sale of produce (and the social and economic issues relating to both) reinforces the importance of having strong policies in place to tackle these challenges. Timeline of Finance Minister announces measures to strengthen agriculture, infrastructure, logistics, food processing sectors, capacity building, governance, and administrative reforms for agriculture, and Fisheries during lockdown restrictions in India (Figure 4.2). The Indian Ministry of Finance help package under the existing Pradhan Mantri Garib Kalyan Yojana program specifically targets the poor to help them fight the battle against COVID‐19, to cope with the nationwide lockdown and it's financial consequences. The rate of wages in India has also been revised and increased for all those working under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). This scheme is one of the world's largest wage schemes. Finally, the GoI has recently established a program called the Prime Minister's Citizen Assistance and Relief in Emergency Situations (PM‐CARES) Fund, which was created on 27 March 2020. Hon'ble Narendra Modi is the chairman of PM‐CARES funds and that trustees include Minister of Home Affairs, Amit Shah, the Minister of Defence, Rajnath Singh, and the Minister of Finance, Nirmala Sitharaman. PM‐CARES aimed at building capacity to resolve national challenges caused by future pandemics for combating, and containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future (Figure 4.3). Due to the completeness of the lockdown and primary focus on stopping the spread of the disease, consumers, agricultural marketers, farmers, daily wage earners, and other stakeholders suffered enormously.
4.5 The Economic Challenges of Local Farmers
India is an agricultural sector country and about 263 million people are directly engaged in farming in which only 45% have their own cropland. Rest 55% peoples rely on other nonagricultural occupation for their livelihood (Lowe and Roth 2020; Mahendra Dev and Sengupta 2020). Before COVID‐19, the part of the GDP of India stemming from the agricultural sector experienced growth rates at around 3.2% per year for six continuous years from 2014 to 2019 and expected a similar growth of between 2.4 and 3.7% from the fiscal year 2019 (FY19) to the fiscal year 2020 (FY20) (National Statistical Office of India). This expected growth has been replaced by a sharp decline of about 5% in the first quarter (Q1) of the 2020 fiscal year (FY) due to the lockdown (FAO 2020). Trends in the agricultural part of the GDP of India can largely be attributed to variations in wages in the agricultural sector and hence to the operation of local farming systems. Figure 4.4 compares recent variations of the average
