The agriculture sector needs a transformation to ensure sustainable livelihood for farmers and food security for the people, the Economic Survey for 2015 - 16 said on Friday.
"The transformation has to be steered by raising farm productivity, investing in efficient irrigation technologies and efficient use of all inputs, " said the survey, tabled in parliament by Finance Minister Arun Jaitley.
Making note of the impact of two consecutive drought years leading to decline of farm productivity and area sown of major crops, it said: "To raise farm productivity, there is need to expand the acreage under irrigation with adoption of relevant technologies for efficient use of water through suitable pricing. "
It also advocated "more crop per drop" to improve farm output and ensure food and water security by stopping its wastage.
Asserting that farm mechanisation had to be promoted on a large scale to overcome labour shortage and improve productivity, the survey called for better equipment for each farming operation and reduce labour costs for each activity.
"With shortage of labour for agriculture operations owing to rural - urban migration, shift from agriculture to services and rise in demand for labour in non - farm activities, there is need to use labour for agriculture operation judiciously, which makes a case for farm mechanisation, " it said.
As fertiliser is a critical and expensive input to improve farm output, the survey stressed on the need to rationalise its subsidy, which accounted for 10 percent of the agriculture GDP in 2013 - 14.
"There is a need to rationalize fertiliser subsidy in an input, crop and region neutral format and minimize diversions, " it said.
It also noted the share of plan outlay for horticulture had increased to 4. 6 percent in 12th plan period from 3. 9 percent in the ninth plan, and during 2013 - 14, horticulture production was 284 million tonnes from 24. 2 million hectares.
Out of categories - fruits, vegetables, flowers, aromatic plants, spices and plantation crops, the highest annual growth of 9. 5 percent was in fruit production while that of vegetables shot up to 1, 67, 058 tonnes.
"India witnessed 18 percent increase in acreage in horticulture crops compared to five percent increase in food grains over five years (from 2010 - 11 to 2014 - 15). Horticulture crops outpaced foodgrain production since 2012 - 13, " it said.
The survey also said that India ranked first in world milk production, contributing 18. 5 percent of global output, and its per capita availability increased to 322 grammes per day in 2014 - 15 from 176 grammes per day in 1990 - 91, as against the world average of 294 gm in 2013.