Indian Economy –Unit-II

Major Crops and Cropping Patterns in Various Parts of the Country

Indian agriculture is an important aspect of India’s economy; learn here about the major
crops, and cropping patterns in various parts of the country to understand the agriculture
sector better.

Agriculture accounted for 14% of India’s GDP in 2016-17 and employed more than half a billion
people. Indian Agriculture is dominated by small-scale farming and is characterized by low
productivity.

The Indian agriculture sector employs the largest female labor force in the country which is close
to 65%.

But it suffers from the twin problems of low productivity and excess workforce employed in it
resulting in a low per capita productivity of the workforce. This leads to lesser wages and a high
level of poverty.

The agriculture sector in India has undergone very limited liberalization. The state still plays a
predominant role in Indian agriculture. It is one of the highly subsidized sectors of the economy
because concerns about food security and poverty lead the government to remain strongly
involved through fixing prices for key agricultural products at the farm and consumer levels,
high border protection, bans on or support for exports, and massive subsidies for key inputs such
as fertilizers, water, and electricity.

Cropping seasons
India is geographically very vast, hence it has various food and non-food crops which are
cultivated in three main cropping seasons which are rabi, Kharif, and Zaid.

 The Kharif season starts with the southwest monsoon and supports the cultivation of
tropical crops.
 Rabi season is for winter crops as these crops require less amount of water for growth.
 While Zaid season comes between Rabi and Kharif.

Major crops in India can be classified into:

Food crops: Rice, Wheat, Millets, Maize, and Pulses.

Cash crops: Sugarcane, Oilseeds, Horticulture crops, Tea, Coffee, Rubber, Cotton, and Jute.
Cropping patterns in India
The cropping pattern in India is determined mainly by rainfall, climate, temperature, and soil
[Link] Pattern describes the proportion of area under cultivation of different crops at a
point of time, changes in this distribution over time, and factors determining these [Link]
multiplicity of cropping systems has been one of the main features of Indian agriculture and it is
attributed to rain-fed agriculture and the prevailing socio-economic situations of the farming
communities.

Two distinct irrigated cropping systems emerged in India:

1. One is the Indo-Gangetic Plain region comprising the states of Punjab, Haryana, the plains
of Uttar Pradesh, Bihar, and the plains of Jammu & Kashmir.
2. The other ecosystem may be carved out of coastal areas of Andhra Pradesh and Tamil
Nadu.

Based on homogeneity and commonness, major crop regions in India may be divided as follows:

 Rice Region
 Wheat Region
 Jowar-Bajra Region
 Cotton Region
 Millet and Maize Region
 Fruit and Spice Region

Based on combinations of crops grown following cropping systems exist in

India:Monocropping: Monocropping is when the field is used to grow only one crop season
after season. This is harmful to soil health.

Crop Rotation: Crop Rotation means changing the type of crops grown in the field each season
or each year (or changing from crops to fallow). Crop rotation improves the soil structure and
fertility, and because it helps control weeds, pests, and diseases.

Sequential Cropping: Sequential Cropping involves growing two crops in the same field, one
after the other in the same year.

Intercropping: Intercropping means growing two or more crops in the same field at the same
time.

Mixed Intercropping: Planting the main crop in rows and then spreading the seeds of the
intercrop (such as a cover crop) in between is called mixed intercropping.
Row Intercropping: Planting both the main crop and the intercrop in rows. The rows make
weeding and harvesting easier than with mixed intercropping.

Stir Cropping: Stir Cropping involves planting broad strips of several crops in the field.

Changing cropping patterns in India

A cropping pattern is a dynamic concept as it changes over space and time which occurs due to
an increase in the prices of crops.

Green Revolution also led to changes in the cropping patterns. Rice was introduced to Punjab,
Haryana, and Uttar Pradesh.

New technologies in Indian agriculture play a vital role in determining the cultivation of crops.

Farmers have changed their crop patterns to reap the benefits of economic expansion due to
which they are intensively moving towards the cultivation of cash crops from traditional crops.

Population explosion and urbanization have led to land conversion, boosting intensive farming,
and have brought changes in cropping patterns.

Cropping patterns may also be influenced by government action undertaken in the form of an
administrative and legislative measures. Supply of inputs by the government, intensive schemes
for various crops, various government campaigns, transportation, and marketing provisions also
influence the cropping pattern in the country.

Indian agriculture has been seeing a deceleration in growth compared to the growth of the larger
economy which has been widening disparities between the incomes of workers in non-
agricultural and agricultural sectors.

Indian farmers are very much poverty-stricken and conservative still their cropping pattern can
be changed through appropriate changes in economic motives.

There is a need to shift to sustainable agriculture. The policies should consider the environmental
cost as well. The planning should be done with the fact that the next generation also needs to
have food security.

Indian agriculture under the five year plans From 1947 to 2017, the Indian economy was
premised on the concept of planning. This was carried through the Five-Year Plans, developed,
executed, and monitored by the Planning Commission (1951-2014) and the NITI Aayog (2015-
2017)
Overcome these shortfalls, the First 5-Year Plan gave a predominant importance to the
development of agriculture and irrigation.
Five Year Plan and Indian Agriculture:
Agriculture under First Plan:
The chief objective of First 5-Year Plan was to restore the disequilibrium created by the Second
World War and the Partition. The Partition of the country resulted in a transfer of the fertile
wheat areas of the Punjab and rice areas of Bengal to Pakistan. Pakistan also benefited by getting
the long-stapled cotton and jute-growing areas. And a relatively much large acreage of the
irrigated area.
Overcome these shortfalls, the First 5-Year Plan gave a predominant importance to the
development of agriculture and irrigation out of a total actual investment of Rs. 1960 crores
made in the first plan. Rs. 601 crores i.e. 31% was allocated for agriculture.
There were two components of agricultural investment In the public sector,
Rs, 291 crores (15%, of the total) was allocated to agriculture & C.D.P. and the balance of Rs.
310 crores (or 16% of total) was the share of irrigation.
It was expected that the index of farm output would increase from about 100 in 1949-50 to 114
in 1955-56.
Agriculture under Second Plan:
The over-fulfillment of First 5-Year Plan target of food output made the planners think that the
food problem was solved and that the agricultural base was strengthened. Hence, they devoted a
relatively less outlay for agriculture 20% of the public outlay (or Rs. 4800 crores) as compared to
33% in the First Plan.
In money terms, however, the outlay in the Second Plan was higher. It was Rs. 1050 crores as
compared to only. Rs.758 crores in the First Plan. The targets originally fixed for the Second
Plan which were much lower were revised upward and they were given as in the following table.
These targets were to be achieved by the same measures as those in the First Plan. The following
table gives the actual production at the end of Second Plan.
The actual progress in agricultural front was quite substantial but fell far short of targets fixed
earlier, e.g. against 21 mn. acres of additional land to be brought under irrigation, the actual
achievement was about 16 mn. acres only.
The consumption of fertilizer increased very slowly. In brief the methods of increased
agricultural production did not make as much headway as was originally visualised by the
Planning Commission. However the actual output by the end of Second Plan was much more
than the actual output of the beginning of the Second Plan. But these was a shortfall in the
Production of all commodities except sugar cane and tea.
The Planning Commission has been blamed for all this on the ground that it did not give enough
emphasis to agricultural development and instead it turned its attention to the growth of heavy
and basic industries. We are of the opinion that such a criticism was not fair to the Planning
Commission. It did understand the significance of increased farm output, but it believed that with
a smaller outlay, it would be possible to bring about a larger output.
The poor development of agriculture during Second Plan led to a good number of difficulties in
the Indian economy. The most important effect was the rise in the price level. During this Plan,
the wholesale price index of all commodities increased by 35%.
As a result of rise in farm prices, other commodities also recorded rise in prices. An inflationary
situation rapidly appeared. The imports of food grains which were cut during First Plan had to be
resumed and precious foreign exchange meant for machinery and other industrial raw materials
had to be wasted in importing food grains.
Agriculture under Third Plan:
Third 5 year Plan gave a Predominant emphasis to agriculture. One of the major objectives of the
Plan was to achieve self-sufficiency in food grains and to increase agricultural production for
exports.
It says, in the scheme of development during the Third Plan the first priority necessarily belongs
to agriculture. Experience under the first two plans and especially in the second plan has shown
that the rate of growth in the agricultural production is one of the main limiting factors in the
process of Indian economy.
Agricultural production has therefore, to be increased to the largest extent feasible, and adequate
resource have to be provided under the Third Plan for raising the agricultural production. The
rural economy has to be diversified and the proportion of the population dependent on
agriculture gradually diminished.
There are essential aims if the income and levels of the rural population are to rise steadily and to
keep pace with income in other sectors. Both in formulating and implementing programmes for
the development of agriculture, the guiding consideration is that whatever is physically
practicable should be made financially possible and the potential of each are a should be
developed to the possible extent.
In short, the Third Plan failed on the agricultural front. In contrast to the targeted increase of
30% or 6% per year in food grains a bare 10% or 2% per year was realized: at the same time, the
index of food grains prices had short up from 118.4 in 1961-62 to 168.8 in 1965-66. As a
consequence of the shortfall in food production food-grains worth Rs. 1.10 crores were imported
between 1961-62 and 1965-66. This strained our foreign exchange position still further.
Agriculture under the Annual Plan:
The Third 5 Year Plan, consequently the Fourth Plan could not be introduced in April 1966.
Instead the Govt. introduced the annual plans for three years-1966 to 1969. During these annual
plans actual expenditure on agriculture worked out to be Rs. 1624 crores which was 24% of the
total plan investment of 6757 crore rupees.
The three years of the ‘Plan Holiday’ viz. 1966-67 to 1968-69 witnessed the adoption of the new
agricultural strategy, which has come to be commonly [Link] the green revolution, and is
composed of a package, chiefly of four improvements, none of which is wholly effective without
the others: improved varieties increased use of fertilizers, improved water supplies and better
agricultural practices. With it are also associated increasing mechanisation of agricultural
operations and measures of plant protection from pests and diseases
On account of the drought conditions during 1966-67 minor irrigation received a high priority
and the programmes were undertaken on an emergency basis. In addition to this, programmes of
high-yielding varieties along with the requisite application of chemical fertilizers were
undertaken.
A good year of rainfall coupled with efforts to improve production with a new technological
resulted in a record food grains production of 95.6 mn. tonnes in 1967-68. Although the targets
for 1968-69 was 102 mn. tonnes, it was not possible to reach the target in view of the crop failure
in some regions in India. However the production of food grains. was maintained at the level of
95.6 mn. tonnes in 1968-69. The consumption of chemical fertilizers also touched the level of
1750 thousand tonnes in 1967-68.
Agriculture under Fourth Plan:
The bitter experience of the Third Plan made the Planning Commission realize the fact that
planning would be a failure unless agricultural production was increased rapidly. Accordingly
Planning Commission assigned a high priority to agriculture.
Even in the case of industries, the Planning Commission emphasised those industries which
supply fertilizers, agricultural machinery etc. The approach to Fourth Plan emphasised the need
of creating favourable economic conditions for the formation of agriculture, a systematic effort
to extend the application of science and technology to agriculture and in general intensify
agricultural programmes to the maximum possible extent in selected areas.
The Fourth Plan had the following two main objectives in the agricultural sector:

 To provide the conditions necessary for a sustained increase of about 5 per cent
per annum over the next decade.
 To enable as large a sector of the rural population as possible, including the small
farmer, the farmer in dry areas and agricultural labourers to participate in
development and share its benefits.

The strategy of agricultural development was based largely on the further extension of the high
yielding varieties (HYV) and multiple cropping programmes.
The Fourth Plan envisaged an expenditure of Rs. 3814 crores on Agriculture which was 24% of
the total expenditure of Rs 15902 crores. But the actual outlay was less.
The Fourth Plan postulated an annual growth rate of 5% for agriculture as a whole. The
compound growth rate target for food’ grains worked out to be 5.6% p.a. Frankly speaking none
of the targets fixed in the Fourth Plan was realised.
The target for food grains was 129 mn. tones for 1973-74, but the actual production in that year
was only 103 mn. tonnes. The target for what was attained easily-intact, it was exceeded in 1971-
72 when wheat output was 26 mn. tonnes as against the target of 24 mn. tonnes for the final year
of the Plan.
As against the target of 15 mn. tonnes in 1973-74,. the actual production of pulses in that year
was only 98 mn. tonnes. In rice against the target of 52 mn. tonnes, the actual production was
43.7 mn. tonnes. In important commercial crops like cotton and jute actual production was much
below the target level.
As against the target of 80 lakh bales the actual production of cotton in 1973-74 was only 38 lakh
bales. In jute as against a target of 74 lakh bales, actual production was only the order of 62 lakh
bales in 1973-74. With respect to oilseeds and sugarcane too the progress was below expectation.

The overall rate of growth of agricultural production during Fourth Plan was only 2’8% p.a. In a
number of crops, the growth of output had fallen short of the growth of population, leading to a
decline in the per capita availability of essential wage good. The unsatisfactory performance of
the agricultural sector was the root cause of the stagnation of national income and inflationary
pressures since 1972-73.
Agriculture under the Fifth Plan:
During the Fifth Plan, Rs. 7,411. crores will be spent on the development of agriculture and
irrigation which accounts for 20% of the total Plan outlay. Beside this, investments by the private
sector shall be of the order of Rs. 2,950 crores.
Taking public and private, sectors, together, total outlay on agriculture, will be of the order of
Rs. 10,361 crores. With this level of outlay, the Fifth Plan has targeted a growth rate of 4.2% for
food-grains as a whole. This is distinctly, less ambitions as than the target set out in the Fourth
Plan.
In determining targets the Fifth Plan has clearly stated its objectives:
“It is envisaged that the fulfillment, of these targets will make country not only self-sufficient in
respect of food grains but also leave a cushion for building a buffer stock. The dimension of
growth in commercial crops envisaged in the Plan are such as to take care of export requirement
in addition to meet the indigenous needs by way of industrial raw material.” In other words, the
objective is food self-sufficiency and self-reliance.”
Agricultural Development under Sixth Five Year Plan:
The Sixth Five Year Plan (1980-85) was started in an extremely different circumstances as the
year of 1979-80 witnessed a worse drought. It affected agricultural production adversely.
However, the achievements of the plan were satisfactory.
Agricultural Production:
Among the different crops, only wheat has been keeping pace with the plan targets. The
production of rice came close to the target of 55 million tons in 1980-81 but failed to show any
improvement in the following years. Kharif crop also suffered a setback due to drought weather
in many parts of the country during 1982-83. The total production of all food grains in the
terminal year of sixth plan was recorded 138.1 million tons. Out of it, the production of rice and
wheat was about 54.5 and 41.2 million Ions, respectively.
Similarly, oilseeds production was 11.4 million tons against as target of 12.5 million tons. Millet
production has moved nearer to the target in 1984-85. Table 29.8 shows the trends of agricultural
production ending 1984-85. Similarly ,indeed number for the same period exhibits the
agricultural production has been highlighted in table.

Weather conditions were favourable during 1978-79 and 1981-82 which enabled the farmers to
make better use of inputs and infrastructure resulting in bumper harvest. This period can
specifically be considered as a turning point in Indian agriculture as it could stand a challenge to
natural calamities with comparatively less damage.
The plan has set a target of additional irrigation of 5.6 million hectares from major and medium
and 8 million hectares from minor schemes. The utilisation potential for major/medium and
minor schemes of irrigation was 60.58 million hectares in 1984-85 against 54.1 million hectors
in 1980-81. Under the 20-Point Programme, the target was raised to 14.00 million hectares
against 13.6 million hectares.
The achievement in the first three years is 6.22 million hectares. By 1981-82, an area of 46.5
million hectares was brought under high yielding varieties, which increased to 54.1 million
hectares in 1984-85. Chemical fertilizer obtained anticipated achievement in 1982-83 of 60.64
lac tons against the target of 46.50 lac tons. The consumption of fertilizer during 1981-82 was
60.6 lac tons which increased to 82.2 lac tons in 1984-85.
For the development of dry farming during 1982-83.3824 micro watersheds covering 3.8 million
hectares were to be identified by various states. It had covered 4111 micro-watersheds against
the total target of 3824 watersheds by the end of March 1983. Upto July 1983, 43.31 lac acres of
land had been declared surplus under the revised land ceiling laws. 29.45 lac acres have been
taken over by the states and out of this 20.05 lac acres have been distributed among 14.82 lac
eligible families of landless agricultural workers. The consumption of plant protection materials
was below expectations i.e. actual consumption in 1984-85 was only 56000 tons.
Minikits and Other Programmnes:
The central sector scheme of community nurseries of rice and minikit distributions of rice,
wheat, jowar, bajra, maize and rabi were intensified in order to create a visible impact on
production of cereal crops. The physical target of coverage of area under the community
nurseries of rice was raised from 15000 hectare to 25000 hectares during 1982-83.1.42 lac
minikits were distributed during 1982-83 against 14000 minikits during 1981-82.
Agricultural marketing and Rural Godowns:
In 1982-83, 40 selected regulated markets, 2 terminal markets. 350 primary rural markets in rural
area and 20 wholesale markets in backward area have been provided the central assistance for
the development of infrastructural facilities. 2371 godowns having a storage capacity of 10.65
lac tons were sanctioned upto 1981-82. In 1982-83, 4 lac tons capacity of additional target was
expected to have been achieved.
Agricultural Credit:
The National Bank for Agriculture and Rural Development (NABARD) was set up in July 1982.
As on 30th June 1981, there were 27 State Cooperative Banks, 327 Central Cooperative Banks,
94019. Primary Agricultural Credit Societies and 19 State Land Development Banks with 1731
Primary Land Development Banks. The Commercial Banks had 17658 rural and 8370 semi
urban branches in the country. The total credit under multi-agency was recorded to be Rs.5556
crores in 1984-85.
Agricultural Development in Seventh Plan:
The outlay for agriculture and allied sector including forestry and wild life was Rs. 10524 crore
in Seventh Plan against Rs.6440 crores in Sixth Five Year Plan Period. The average level of
annual production of food grains during the plan period was around 155 millions tonnes. In
1990-91 food grain production reached to the level of 176-92 million tonnes against the
production of 140.35 million tonnes in 1987-88.
Wheat production has increased to 2244 Kg/ha in 1989-90 while the production of cereals
reached to the level of 34.76 million tonnes in the same year. The production of pulses and
oilseed peaked to the level of 14.06 and 18.46 million tonnes in 1990-91. The production of
sugarcane reached a record level of over 240 million tonnes in 1990-91.
The certified seeds distributed were 57.04 lakh quintals ending 1989-90 against the target of 70
lakh quintals. The total consumption of N, P and K was 11.5 million tonnes while pesticides was
of 72.47 thousand tonnes ending the plan period. The area under high yielding varieties was 63.1
million hectares against the target of 70.00 million hectares. The production of tea and rubber
was increased from 652 million Kgs. and 201000 tonnes in 1984-85 to 703 million Kgs and
297000 tonnes in 1989-90 respectively.
During the plan period, disbursement of agriculture credit through cooperatives commercial and
regional rural banks increased from Rs.5810 crores in 1984-85 to Rs. 12570 crores by 1989-90.
The debt relief scheme was announced in 1990-91, affected the recovery climate resulting in a
lower volume of credit flow.
There were 76,000 fertilizer retailer outlets and 40 lakh tonnes of fertilizer nutrients were
distributed during 1989-90. The number of co-operative godown/warehousing capacity increased
from 80 lakh tonnes in 1984-85 to 100 lakh tonnes in 1987-88. Soil and water conservation
activity in 27 catchments taken up in 17 states covering 2.4 million hectares by the close of plan
period.
The contribution of the livestock sector has increased to Rs. 27,700 crores in 1987-88 as
compared to Rs. 10,000 crores in 1980-81 which constitutes 25.5 percent of the total agricultural
output. By the end of Seventh Plan, 22.75 lakh tonnes of marine and 14.02 lakh tonnes of inland
fish were produced, indicating an average annual growth rate 6.25 per cent. However, during
1990-91 export of marine products was 138400 tonnes valued at Rs.8.90 crores while fish
production stood at 38.36 lakh tonnes over the same year.
The number of national dairy co-operative societies increased from 34523 in 1984-85 to 64000
in 1991-92. The progress in case of milk, eggs and wool was 41.5 million tonnes; 14252 millions
and 3S.0 in. Kgs. in 1984-85 respectively which rose to the level of 51.1 million tonnes 920204
and 41.7 m. Kgs. for milk, eggs and wool ending 1989-90.
Agricultural Development in the Eighth Plan:
Eighth Plan envisages to spend Rs. 22,467 crore on agricultural development. For rural
development a total sum of Rs. 34,425 crore has been fixed whereas Rs. 6,750 crore on special
area programme and Rs. 35,525 crore on irrigation and flood control have been proposed in the
draft of the plan.
In this way agricultural sector alone will attract 22.2 percent of the total plan expenditure. Self-
sufficiency in food grains and development and diversification of agriculture to generate export
surplus are the main objects of the plan. Apart from this, plan emphasises to increase food grains
production to 2100 lakh tonnes, of sugarcane to 2,750 lakh tonnes, of cotton 140 lakh bales and
of jute to 95 lakh bales.
Eighth Five Year Plan envisages to continue work on 312 medium and 182 major projects
initiated during the seventh plan. The draft of the plan emphasizes to make Command Area
Development Programme more effective. In the draft of the plan, medium irrigation projects
were accorded high priority. Flood control programmes will be made more meaningful. Thus, in
Eighth Plan, a sum of Rs. 35,525 crore have been proposed on irrigation development and flood
control measures.
In the agricultural sector, the country has achieved 5 per cent rate in 1992-93 and 2.3 per cent
growth rate in 1993-94. Total production of food grains has increased to 179.5 million tonnes in
1992-93 showing a growth rate of 6.6 per cent and then it slightly increased to 184.0 million
tonnes in 1993-94 showing a growth rate of 1.4 per cent and further 199.0 million tonnes in
1996-97. Thus the agricultural sector both in respect of food grains and fibre crops has registered
almost a stagnation during the first two years of the Eighth Plan.
In 1994-95, production of food grains has increased to 191 million tonnes which shows a growth
of only 3.7 per cent. Thus the new economic policy could not create any favourable impact on
the performance of the agricultural sector of the country. The potential of irrigation increased
from 728 lakh hectares to 894 lakh..
The agricultural development strategy during Ninth Five Year Plan is based on the Policy of
food security announced by the Government to double the production and make India hunger
free in ten years.
Accordingly the Ninth Plan target is to achieve a growth rate of about 4.5 per cent per annum in
agricultural output and production of 234 million tonnes of food grains by 2001-02. In order to
achieve the goal of doubling the food output and alleviation of hunger, a regionally differentiated
strategy based on agro-climatic regional planning will be adopted.
Agro-climatic based planning is to be promoted for high productivity zone, low productivity-
high potential zone, low productivity zone and ecologically fragile regions. The table below
presents the targets of production for agricultural commodities for 2001-02. Plan emphasised on
raising the capabilities of small and marginal fanners and conserving and maximising the value
from scarce natural resources. Emphasis was laid on infrastructure development and minor
irrigation.
Regional programmes was formulated particularly for hilly backward and tribal areas.
Agricultural credit got special attention and efforts were made to increase public investment
during the plan period. In every district rural infrastructure development fund was used to
promote productive projects.
A high emphasis was placed given for the development of the allied sectors such as horticulture,
fisheries, live-stock and dairy. Agricultural exports will receive special attention and the co-
operative will be strengthened.
It has also been emphasised that agro-processing and agro-industries will be encouraged.
Agriculture and allied sector has attained 2.7 per cent growth rate against its target of 3.9 per
cent. The same sector attained the growth rate of (-) 2.4 per cent in 1997-98,7.1 per cent in 1998-
99 and a mere 0.7 per cent in 1999-2000 and 0.9 per cent in 2000-2001.
The index of agricultural production (1981- 82=100) increased from 165.3 in 1997-98 to 178.1
in 1998-99 and then declined to 176.8 in 1999-2000 and 170.6 in 2000-2001. Total production of
food grains has also increased substantially from 192.3 million tonnes in 1997-98 to 203.5
million tonnes in 1998-99 and then to 208.9 million tonnes in 1999-2000. It, further declined to
199.0 million tonnes in 2000-01. Thus, the agriculture and allied sector has shown a mixed
performance during the Plan period of Ninth Five Year Plan.
Agricultural Development in the Tenth Plan:
Although the draft Tenth Plan had set a target to attain annual average growth rate of 3.97 per
cent in Agriculture and allied sector, but during the Tenth Plan it has attained (-) 7.2 per cent in
2002-03 and then to 10 per cent in 2003-04 and 6.0 per cent in 2005-06 and is expected to attain
only 2.7 per cent in 2006-07.
Total production of food grains increased from 179.4 million tonnes in 2002-03 to 212.4 million
tonnes in 2003-04 and then to 208.3 (P) million tonnes in 2006-07. The index of agricultural
production in 1981-82 = 100) increased from 150.4 in 2002-03 to 181.0 in 2003-04 and then to
197.1 in 2006- 07. Thus the agriculture and allied sector has been showing a mixed performance.
Agricultural Development in 11th Plan:
Although the agricultural sector of the country is having a great potential but the growth rate of
the sector is very low. The greatest challenge before the Eleventh Plan is to double the growth
rate of agriculture so achieved in the Tenth Plan. This will require steps both on the demand side
as well as the supply side.
On the demand side there is evidence that farmers face adverse demand conditions. Not only the
agricultural growth has been low in the last decade but the prices received for the agricultural
products have also failed to keep pace with the costs or the general price level and as a result
profitability of the sector has declined.
The Approach Paper of the Eleventh Plan is of the view that some of the steps already taken such
as introduction of National Rural Employment Guarantee Programme (NREGP) along with
expansion of public sector schools and health facilities would directly and indirectly generate
demand support for agriculture.
Moreover, improved rural connectivity envisaged through Bharat Nirman can also trigger growth
of an integrated national market where rural areas are more able to meet each other’s demand.
Such expanded rural—rural trade is likely to be important in the initial years along with other
efforts of demand support such as promoting agricultural exports, for strengthening support to
agricultural diversification for domestic processing which are likely to attract private corporate
investment into rural areas.
The supply side challenge of doubling agricultural growth is also formidable. This is mainly
because no dramatic technological breakthrough comparable to the green revolution is presently
visible. We are also not initiating or exploiting the potential of existing technology. In fact, most
of the growth required in cereals, pulses and oilseeds is possible merely through plausible yield
increase in currently low yield regions untouched by green revolution.
The National Commission on Farmers has also drawn attention to the knowledge deficit which
constrains agricultural productivity. In order to overcome this problem farmer will need effective
links to universities and best practices through a good extension system. The problem of lack of
credit facilities needs to be addressed.
Accelerated agricultural growth will require diversification into horticulture and floriculture,
effective marketing linkages supported by modern marketing practices adopted through grading
post- harvest management, cold-chains, etc. to be established for expanding domestic market and
also the export market.
There is also the need for risk management through expansion of crop insurance. The
government must devise the viable policy packages to cover all agro-climatic zones. There is
also the need for stimulating agricultural research to address the newer and more formidable
challenges. The contract farming is a potentially effective way of attracting corporate investors to
help establish linkages with markets and also provide farmers with necessary inputs, extension
and other support and advice.
Moreover, there is also need for better water management and effective irrigation facilities.
Watershed management, rainwater harvesting and ground water recharge can also help in
augmenting water availability in rainfed areas. Side by side there is also the need for developing
animal husbandry and fishery activities to revive agricultural dynamism.
However, there is urgent need for taking agriculture into a higher growth trajectory of 4 per cent
annual growth and such target can only be met with improvement in the scale as well as of
quality of agricultural reforms undertaken by the various states and agencies at the various
levels.
These reforms must aim at efficient use of resources and conservation of soil, water and ecology
on a sustainable basis and in holistic framework which must incorporate financing of rural
infrastructure such as water, roads and power.
Criticism of Agricultural Planning in India:

 Self-Complacency:

The First 5-Year Plan wisely gave a top priority agriculture But the Second 5-Year Plan failed to
give agriculture a proper place. It appears, the success of the First 5-year Plan, which was
primarily due to a series of favourable Monsoons created a sense of self-complacency.

 Quick-Yielding Projects Not given Sufficient Importance:

Projects having a long gestation period were given undue importance and those with a short
fruition lag were not given sufficient importance. Minor irrigation works did not receive the
attention they deserved. More attention was given to expansion of irrigation potential and less to
maintenance of existing works so that increase in irrigation potential was neutralized by loss of
irrigation potential.

Unproductive Expenditure:Unnecessarily large sums were provided for unproductive

expenditure.

Inadequate Provision for Rural Credit:The annual credit requirements of the Indian
farmers have been estimated at Rs. 10, 000-12,000 mn. whereas the provision is not even for Rs.
3500 mn. Without adequate credit facilities agriculture cannot progress.

No Provision for Agricultural Inputs:There has had been co-ordinated provision for the
simultaneous production of agricultural inputs like fertilizers, pesticides, cement, etc.

New Farming Techniques Not Enforced:In agricultural planning in India, no concrete steps
were taken for the adoption of new agricultural technique and for standardizing farming
practices.

Lack of Suitable Price Policy:Unless farm output programmes are backed by a suitable
agricultural price policy providing price support and incentives to the growers, things might go
wrong and they have actually gone wrong in India.

Morale Neglected:India is passing through a crisis of confidence. The planners did not provide
for any concrete measure to keep up the morale of the people.

Unrealistic Planning:The failure to achieve targets indicates the unrealistic element in

agricultural planning in India. The physical targets have proved ,to be “paper targets” treating
irrigated area from all sources alike and to put all types of food grains superior and inferior
together and above all to split up minutely the total allotment: under, different headings assigned
to different authorities, are a few, instances of unrealistic planning

Delay in Land Reforms:Land reforms have not been implemented and whichever
implemented have been delayed much.

Role of industries in economic development in india

What is the role of industries in economic development in India?

Industrialisation process helps to remove regional imbalance. (vii) Use of surplus labour:
Industrial development is necessary for utilization of surplus labour. The agricultural sector is
unable to provide gainful employment facility to surplus labour. The industries used these labour
force productivity.
Following points bring out the importance of industry in an economy:
(i) Structural Transformation: Industrial development brings about structural transformation in
the economy. It means that the dependence of our economy on agriculture will be reduced.
(ii) Source of Employment: Indian economy has a very large skilled workforce which is still
unemployed. establishment of industries which can generate employment opportunities on a
large scale.
(iii) Enhancing further the Economic Growth: As industrialisation progresses, the capital goods
industry also starts to flourish. This helps in further economic growth and fosters investment and
growth.
(iv) Infrastructural Growth: With the spread of industrialisation, the need for economic
infrastructures such as roads, dams, banking, insurance and communication facilities also rises
and this leads to their growth. Also with the improvement in quality of life, the demand for social
infrastructure i.e., facilities related to health and education, also rise and leads to their
development.
(v) Share in GDP: Industries contribute to the GDP of the country. During the years, the share of
the industrial sector has increased from 16.6% in 1950 - 51 to about 30% in 2011-12 (at constant
prices).
(vi) Strengthening the Economy: Industries help to strengthen the economy in followings ways:
(a) With the growth of the capital goods industry, the country is able to produce a number of
goods in large quantities and at low cost.
(b) It helps in the establishment of infrastructure goods like dams, railways, etc, which cannot be
imported
(c) Industrialisation has helped our country to become self-reliant in defence goods.

Industrial policy since 1991

The New Industrial Policy, 1991 had the main objective of providing facilities to market forces
and to increase efficiency. The government allowed Domestic firms to import better technology
to improve efficiency and to have access to better technology.

The New Industrial Policy of 1991 comes at the center of economic reforms that
launched during the early 1990s. All the later reform measures were derived out of the
new industrial policy. The Policy has brought comprehensive changes in economic
regulation in the country. As the name suggests, these reform measures were made in
different areas related to the industrial sector.

As part of the policy, the role of public sector has been redefined. A dedicated reform
policy for the public sector including the disinvestment programme were launched
under the NIP 1991. Private sector has given welcome in major industries that were
previously reserved for the public sector.

Similarly, foreign investment has given welcome under the policy. But the most
important reform measure of the new industrial policy was that it ended the practice of
industrial licensing in India. Industrial licensing represented red tapism.

Because of the large scale changes, the Industrial Policy of 1991 or the new industrial
policy represents a major change from the early policy of 1956.

The new policy contained policy directions for reforms and thus for LPG
(Liberalisation, Privatisation and Globalisation). It enlarged the scope of private sector
participation to almost all industrial sectors except three (modified). Simultaneously,
the policy has given welcome to foreign investment and foreign technology. Since
1991, the country’s policy on foreign investment is gradually evolving through the
introduction of liberalization measures in a phasewise manner.

Perhaps, the most welcome change under the new industrial policy was the abolition of
the practice of industrial licensing. The1991 policy has limited industrial licensing to
less than fifteen sectors. It means that to start an industry, one has to go for license and
waiting only in the case of these few selected industries. This has ended the era of
license raj or red tapism in the country. The 1991 industrial policy contained the root
of the liberalization, privatization and globalization drive made in the country in the
later period. The policy has brought changes in the following aspects of industrial
regulation:

1. Industrial delicensing

2. Deregulation of the industrial sector

3. Public sector policy (dereservation and reform of PSEs)

4. Abolition of MRTP Act

5. Foreign investment policy and foreign technology policy.

1. Industrial delicensing policy or the end of red tapism: the most important part of
the new industrial policy of 1991 was the end of the industrial licensing or the license
raj or red tapism. Under the industrial licensing policies, private sector firms have to
secure licenses to start an industry. This has created long delays in the start up of
industries. The industrial policy of 1991 has almost abandoned the industrial licensing
system. It has reduced industrial licensing to fifteen sectors. Now only 13 sector need
license for starting an industrial operation.

2. Dereservation of the industrial sector– Previously, the public sector has given
reservation especially in the capital goods and key industries. Under industrial
deregulation, most of the industrial sectors was opened to the private sector as well.
Previously, most of the industrial sectors were reserved to the public sector. Under the
new industrial policy, only three sectors- atomic energy, mining and railways will
continue as reserved for public sector. All other sectors have been opened for private
sector participation.

3. Reforms related to the Public sector enterprises: reforms in the public sector were
aimed at enhancing efficiency and competitiveness of the sector. The government
identified strategic and priority areas for the public sector to concentrate. Similarly,
loss making PSUs were sold to the private sector. The government has adopted
disinvestment policy for the restructuring of the public sector in the country. at the
same time autonomy has been given to PSU boards for efficient functioning.

4. Foreign investment policy: another major feature of the economic reform measure
was it has given welcome to foreign investment and foreign technology. This measure
has enhanced the industrial competition and improved business environment in the
country. Foreign investment including FDI and FPI were allowed. Similarly, loan
capital has also introduced in the country to attract foreign capital.

5. Abolition of MRTP Act: The New Industrial Policy of 1991 has abolished the
Monopoly and Restricted Trade Practice Act. In 2010, the Competition Commission
has emerged as the watchdog in monitoring competitive practices in the economy.
The industrial policy of 1991 is the big reform introduced in Indian economy since
independence. The policy caused big changes including emergence of a strong and
competitive private sector and a sizable number of foreign companies in India.

Role of public sector

The public sector undertakes a variety of activities that include infrastructure development,
employment generation, and the promotion of exports. Some of the objectives of the public
sector in India are: to promote industrialization; generate employment; develop infrastructure
and promote exports.

Following are some of the important relative roles of the public sector in the economic
development of a country like India:

(a) Promoting economic development at a rapid pace by filling gaps inthe industrial
structure;(b) Promoting adequate infrastructural facilitiesforthe growth of the
economy; c) Undertaking economic activity in those strategically significant
development areas, where private sector may distort the spirit of national
objective; (d) Checking monopolies and concentration of power in the hands of
few; (e) Promoting balanced regional development and diversifying natural
resources and other infrastructural facilities in those less developedareas of the
country; (f) Reducing the disparities in the distribution of income and wealthby
bridging the gap between the rich and the poor; (g) Creating and enhancing
sufficient employment opportunities indifferent sectors by making heavy
investments; (h) Attaining self-reliance in different technologies as per
requirement; (i) Eliminating dependence on foreign aid and foreign technology;
(f) Exercising social control and regulation through various public finance
institutions; (k) Controlling the sensitive sectors such as distribution system,
allocating the scarce imported goods rationally etc.; and (l) Reducing the pressure
of balance of payments by promoting export and reducing imports. Performance
of the Public Sector he economic and social responsibility of the State has led to
the progressive enlargement of the public sector in India.
The number of Centre’s public enterprises has increased from 5 in 1951 to
246 as attheendof 1995-96. The investment during the same period has increased
from Rs. 29 crores to Rs. 1,75,000 crores. In brief; the public enterprises occupy
an important place in the Indian economy..
Role of private sector in indian economy:
This sector is important for developing the national economy because of the
products and services the company provides and the taxes it pays to the
government. Usually, private sector companies can stabilise the prices of products
and services by creating fair market conditions.
 This sector is important for developing the national economy because of the
products and services the company provides and the taxes it pays to the
government. Usually, private sector companies can stabilise the prices of products
and services by creating fair market conditions.

Importance of Private Sector in Indian Economy

The importance of private sector in Indian economy over the last 15 years has been
tremendous. The opening up of Indian economy has led to free inflow of foreign direct
investment (FDI) along with modern cutting edge technology, which increased the importance of
private sector in Indian economy considerably.

Previously, the Indian market were ruled by the government enterprises but the scene in Indian
market changed as soon as the markets were opened for investments. This saw the rise of the
Indian private sector companies, which prioritized customer's need and speedy service. This
further fueled competition amongst same industry players and even in government organizations.

The post 1990 era witnessed total investment in favor of Indian private sector. The investment
quantum grew from 56% in the first half of 1990 to 71 % in the second half of 1990. This trend
of investment continued for over a considerable period of time. These investments were
especially made in sector like financial services, transport and social services.

The late 1990s and the period thereafter witnessed investments in sector like manufacturing,
infrastructure, agriculture products and most importantly in Information technology and
telecommunication. The present trend shows a marked increase in investment in areas covering
pharmaceutical, biotechnology, semiconductor, contract research and product research and
development.

The importance of private sector in Indian economy has been very commendable in generating
employment and thus eliminating poverty. Further, it also effected the following -
 Increased quality of life
 Increased access to essential items
 Increased production opportunities
 Lowered prices of essential items
 Increased value of human capital
 Improved social life of the middle class Indian
 Decreased the percentage of people living below the poverty line in India
 Changed the age old perception of poor agriculture based country to a rising manufacturing
based country
 Effected increased research and development activity and spending
 Effected better higher education facilities especially in technical fields
 Ensured fair competition amongst market players
 Dissolved the concept of monopoly and thus neutralized market manipulation practices
The importance of private sector in Indian economy can be witnessed from the tremendous
growth of Indian BPOs, Indian software companies, Indian private banks and financial service
companies. The manufacturing industry of India is flooded with private Indian companies and in
fact they dominate the said industry. Manufacturing companies covering sectors like automobile,
chemicals, textiles, agri-foods, computer hardware, telecommunication equipment, and
petrochemical products were the main driver of growth.

The Indian BPO sector is more concentrated with rendering services to overseas clients. The
KPO sector is engaged in delivering knowledge based high-end services to clients. It is
estimated, that out of the total US $ 15 billion KPO service business around US $ 12 billion of
business would be outsourced to India by the end of 2010.