Government to launch Index on Ease of doing agri-business

Union Ministry of Agriculture and Farmers Welfare is planning to launch its own index to rank states on ‘ease of doing agri-business’. It will rank States on basis of reforms in sector as well as their investment in agriculture, increased productivity, reduction of input costs, and risk mitigation measures.

States will be also rated on is their success in reducing the cost of farm inputs by distributing soil health cards and encouraging organic farming and micro-irrigation. Based on performance in this index, Government may reward high performing states (both in absolute and incremental terms) by linking them to allocation of flexi-funds available under various flagship schemes.

Index on Ease of doing agri-business

  • It will aim to incentivise states for various reform measures undertaken by them over years and see how efficient they have been in implementing government programmes.
  • It will broadly rank states on six major reform parameters related to the farming sector and have a total score of 100. These six parameters include
  1. Marketing reforms (weightage of 25).
  2. Reducing cost of inputs (20).
  3. Governance and land reforms (20).
  4. Risk mitigation (15).
  5. Increasing production and productivity (10).
  6. Investment in agriculture (10).
  • The six major identified parameters will be further divided into 2-odd sub-parameters which would be evaluated every year.
  • The rankings of states will be evaluated based on performance information furnished by the state governments to verify their accuracy.
  • Its parameters are process-oriented, thus it will also incorporate as and when reforms or initiatives are undertaken and same would be incorporated into index with appropriate weights.
  • It has wider ambit compared to NITI Aayog’s Agricultural Marketing and Farm Friendly Reforms Index, which ranks states based on their implementation of such reforms.

Why new index?

As agriculture is a State subject, the success of policies and reform initiatives proposed at the Centre is dependent on implementation by the States. Past experience has shown that some states are very progressive in implementing reforms and are taking up initiatives for welfare of farmers. On the other hand, there are many states that have lagged behind, resulting in huge inter-state income disparities. Therefore, to ensure that reforms agenda of government is implemented at desired pace by all states governments, there is need to develop competitive spirit among states through this index.

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