1. International Indexed & Refereed Research Journal, January, 2013 ISSN 0975-3486, RNI- RAJBIL- 2009-30097, VOL- IV * ISSUE- 40
Research Paper—Economics
Economics Reforms and growth of Agriculture in India
January,2013 * Dr. Asha Agrawal
* Prof. in Economics Govt. Nehru P.G.College Burhar, Distt. Shhdol (M.P.)
nant at around 2.5 to 3.0 percent.
Agriculture has got a prime role in Indian economy. It
See Table 1
is an important source of raw material and demands for
Economic survey - 2010-11
many industrial products. Though the share of agricul-
ture in national income has come down, since the in- Finally it is observed that above table shows mini-
mum ratio of agriculture in total GDP.
ception of planning era in the economy but still it has
a substantial share of agriculture in GDP (Gross Do-* 12th Five Year Plan to set 4% agricultural growth
target. The twelth five year plan (2012-17) which is
mestic Product). The contributory share of agriculture
scheduled to be submitted in April 2012. will set a target
of GDP was 55.4% in 1950-51, 52%, in 1960-61 and is at
present 2009-10 reduce to 14.2% only. of 4 percent for agricultural growth as announced by
Mr. Abhijit Sen Member (Agriculture) planning com-
The soul of land reform needs modification to go par-
allel with the process of economic reforms. The ap- mission. Mr. Sen said that there was 2.5 percent
agricultal growth in the 9th and 10th plans, while the
proach paper to the eleventh Five Year Plan has high-
lighted such a holistic frame work and suggested the11th plan which will end this March is expected to show
following strategy to raise agriculture output. growth of 33-35 percent.
(a)Improving water management, rain water harvest * Mr. KV Subbarao, president National seed associa-
ing and water shed development. tion of India, said that the food production has to be
(b) Reclaiming water management rain water harvest doubled by 2015 to meet demand.
ing and watershed development. Any deceleration in the growth of this sector is trans-
(c) Promoting animal husbandry and fishery. lated in the lowering of overall GDP growth. Before
starting any discussion on Indian agriculture we must
(d) Providing easy access to credit at affordable rates.
(e) Bridging the knowledge gap through effective ex look into its special feature.
tension. Agriculture is not only the biggest sector of the
(f) Increasing flow of credit. economy accounting but also the most free private
(g) Support for marketing Infrastructure. sector too it is the only profession which still carries
(h) Export promotion. no burden of individual income tax.
Agriculture products account for 14.7% of the total
The value of acquisitions of new or existing
expert income of the economy. Expert which draw their
fixed assets by the agriculture & allied sectors which
raw materials from the agricultural accounts for 19.3%
is known as gross capital formation, as a proportion to
of the total export.
the GDP in the agriculture & allied sectors stagnated
Agricultural has got a prime role in Indian economy.
around 14 percent during 2004-05 to 2006-07 Now, there
Though the share of agricultural in national income has
is a marked improvement in this figure during the cur-
come down since the inception of planning era in the
rent twelfth Five Year Plan 2007-12. The proportion has
increased to 16.03 percent in 2007-08 and further toeconomy but still it has a substantial share in GDP.
19.67 percent in 2008-08 (Provisional) and to 20.30 Important contribution to employment provides em-
percent in 2009-10 though the GCF in agriculture an ployment to 52% of country's work force and is the
single largest private sector occupation. Indian for-
allied sectors relative to overall GDP has remained stag-
Gross capital formation and allied activities (Rs. Crore at 2004-05 price)
Year GDP Agriculture & allied GCF/GDP in agriculture GCF in agriculture total
activities & allied
2004-05 2971464 76096 565426 13.46 2.56
2005-06 3254216 86511 594487 14.57 2.66
2006-07 3566011 90710 619190 14.65 2.54
2007-08 3899958 105034 655080 16.03 2.69
2008-09 4162509 128659 654118 19.67 3.09
2009-10 4493743 133377 656975 20.3 2.97
Source - central statistics office -
RESEARCH ANALYSIS AND EVALUATION 23

2. International Indexed & Refereed Research Journal, January, 2013 ISSN 0975-3486, RNI- RAJBIL- 2009-30097, VOL- IV * ISSUE- 40
eign trade is deeply associated with agriculture sector, GDP growth due to domestic reform policies and global
Agriculture accounts for about 14.7% of the total ex- boom helped in having higher tax/GDP ratio and better
port earning. The agricultural development strategy allocations to agriculture in the form of public invest-
for India's Five Year Plans is essentially based on the ment credit.
policy on food security announced by the govern- 2) It may be noted that the slowing in agriculture growth
ment, to double the food production and make India could be attributed to the structural factors on supply
hunger free in ten years. The strategy to ensure food side such as public investment, credit technology, land
security is as follows- and water management etc. There are many deficits in
• Doubling food production. Indian agriculture these are.
• Increase in employment & incomes. a) Land & water management deficit.
b)Investment, credit & infrastructure deficits
• Supple mentory / sustained employment and cre c) Diversification deficit.
ation of rural infrastructure through poverty allevia d)Institutions deficit.
tion programmers (PAD) e) Market deficit.
• Distribution of food grains to the people. f) Research deficit.
Conclusion :- The central issue in agricultural development is the
This paper provides an overview of the issues and necessity to increase productivity employment and
policies which are two major conclusions as given income for poor segments by the agricultural popula-
below. tion of whom the small and marginal farmers constitute
1) Structural reforms on agricultural have positive and a sizable portion. For the reveal of agricultural growth
negative effects. Agricultural benefited indirectly due the simulate.
to disprotection given to industry in the post reform Suggestion
period. The terms of trade, private investment, oppor- Efforts would be required on several points this include:
tunities for technology and specialization have in- • Increasing power supply to the sector.
creased for agriculture. On the negative side, trade
reforms might have effected some crepes and increased
• Improvement in terms of trade for agriculture.
dependence on global prices which are valatile. Fiscal • Stepping up investment and putting in place suitable
and financial liberalization also had some adverse im- institutional mechanisms to exploit irrigation poten
pact on investments and credit. It has been concluded tial that exists in most of the states.
by some that the slow down in agricultural growth is • Promoting fertilizer use by expanding the distribu
linked directly to structural reforms in the country and tion network and improving credit facilities for farm
globalization including joining of W.T.O. It may be ers.
noted that the slow down is more to do with domestic • In view of the increasing importance of information
policies. Some of the adverse effects due to structural technology and Bio-Technology.
reforms can be reversed pro agricultural policies. Higher
R E F E R E N C E
1 www. twelth five year plan. Com
2 vkfFkZd leh{kk] Hkkjr ljdkj 2009&10 ist&32
3 flag MkW0 lqnkek] flag ] MkW0 jktho d`".k] Hkkjrh; vFkZO;oLFkk 2011
4 Chanda G.K. (2009) Agriculture and Rural Industrialization in India, Recent development & Future.
5 Agricultural statistics at a glance (2009), Ministry of Finance, GIO, New Delhi.
24 RESEARCH ANALYSIS AND EVALUATION