The Gist of Yojana: September 2014

The Gist of Yojana: September 2014

Investing to Propel Growth in Indian Agriculture

Propelling growth in agriculture is critical as research has revealed that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture (World Development Report, 2008). In that sense alone, true inclusiveness of Indian growth model can come true only when agriculture does better than what it has done in the past. This will override all models that try to achieve inclusiveness through special concessions to a particular community, caste, or class.

Agri-growth Performance since Economic Reforms of 1991

The average annual rate of growth in agriculture & allied sector during the entire period (1991-92 to 2013-14) comes at 3.2 per cent - much lower than the 4.0 per cent targeted in the recent Plan periods. But it has fluctuated widely during various Plan periods (Figure 1).It witnessed a growth rate of 4.8 per cent during the Eighth Plan period (1992-97), but thereafter, it saw a downturn towards the beginning of the Ninth Plan period (1997-2002) and the Tenth Plan period (2002-07), when the agricultural growth rate came down to 2.5 per cent and 2.4 per cent respectively. During the Eleventh Plan (2007-12), agri-GDP growth bounced to 4.1 per cent, but then again fell to 3.0 per cent in the first years of the Twelfth Plan (2012-17).

Source: Central Statistics Office (CSO). All figures are at 2004-05 prices. The figures for 2012-13 and 2013. 14 are as per the Advance Estimates of CSO released on 7th February, 2014

At the beginning of the Twelfth Plan, there were 337 major and medium irrigation projects requiring an indicative budget of more than Rs 4,22,012 crore. Against this need, the annual allocation for agriculture, from irrigation is less than Rs 20,000 crore. This speaks of the neglect of investing in development of water resources agriculture at 4:1, to get four per its proper management.

It is interesting to note here that the public sector accounts for only 20 per cent of the total investment in agricultural sector in India; 80 per cent comes from the private sector.

Source: National Accounts Statistics, CSO; Agricultural Statistics at a Glance, various issues
Note: All Estimates are at 2004-05 prices

In the early 1980s, the shares of the public and private sectors (including household sector) in AGCF were roughly equal, but by the early 2000s, the share of the private sector was four times larger than the share of the public sector.

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