Here's a solution on how to help India's poor. Invest in agriculture! According to one of our studies here in The Economic Times, it is well recognized that every rupee contribution to GDP from farming has double the effect of other methods of poverty alleviation. Agriculture helps drive demand from other sectors indirectly. Thus, even a 4% growth in the sector can cause a robust increase in demand for other goods. Commercial vehicles, FMCG products, consumer durables etc can all get a fillip from higher rural cash flows. Investing in this sector that provides employment to 60% of India's workforce has an added advantage. Better crop yields can help food inflation slow. India's current policies are more short term in nature and heavily dependent on subsidies. A move towards long term solutions such as investing in infra, technology, trade-friendly policies, R&D etc can greatly help the sector. Adoption of global best case practices will also help the poor Indian farmer. This in turn can help our country become more prosperous.
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