The constraints of plenty.

During Nehru's time the Indian economy was shackled by 3 growth constraints, wrote N Rajadhyaksha. First, there was a savings constraint, people were too poor to save much, second, there was foreign exchange constraint, leading to the balance of payments crisis in 1991, and third, food constraint, when we had to be rescued by the PL 480 program of the US and the Green Revolution conceived by Norman Borlaug. Household savings rate climbed to a high of 38.3% in 2007 before falling to 29% in 2016. If the rate of growth accelerates then savings rate will also go up, the Economic Survey predicted. Our foreign exchange reserves have climbed to over $400 billion, enough to pay for about 11 months of imports. As for agriculture, H Damodaran thinks that "Indian agriculture has entered a new era of permanent surpluses". New technologies and changing crop patterns "makes gluts commonplace and shortages temporary". As the economy has evolved, "The nature of constraints have now changed, as is only to be expected in any rapidly growing economy -- infrastructure bottlenecks, institutional rigidities, human capital limitations." True but excess food production is also a constraint on the economy. Milk production has grown from 146 million tonnes in 2014-15 to 176 million tonnes in 2017-18, making India the largest producer of milk. Dairies are unwilling to buy milk from farmers because of falling consumption within India and because they are sitting on 200,000 tonnes of skimmed milk powder which they cannot export due to low international prices. It costs Rs 32-35 to produce a liter of milk but the price dropped to Rs 17 per liter. The government is buying milk at Rs 25 per liter but this is much lower than the cost of production, which makes farmers angry, and an unplanned expense for the government, which adds to the fiscal deficit. Not just milk, farmers of cash crops are also suffering as prices have crashed. "Growth in rural wages, adjusted for inflation, fell to -0.9% in March, after registering a steady fall every month since November last year." Faced with elections next year the government has promised to buy produce at 50% higher than cost. This will add another Rs 120-150 billion to government expenditure and make our crops too expensive to export, wrote Prof A Gulati. The Food Corporation of India already has stocks of 65 million metric tonnes of food grains, so there is no space to store this extra procurement. India wastes $14 billion worth of food every year, as grains rot in the open and pests, like rats, spoil the grains. Agriculture is still a constraint.