Model Answer
0 min readIntroduction
The economic reforms initiated in India in 1991 marked a paradigm shift from a centrally planned economy to a more market-oriented one. These reforms, driven by a balance of payments crisis, aimed to enhance efficiency, productivity, and global competitiveness across all sectors. However, a persistent critique of these reforms is that they have largely bypassed agriculture, leading to a widening gap between agricultural growth and overall economic growth. While other sectors like industry and services experienced significant boosts, agriculture remained comparatively neglected, resulting in agrarian distress and slower rural development. This answer will critically evaluate this assertion, examining the extent to which agriculture has been integrated into the broader economic reform process.
Initial Focus of Economic Reforms & Agriculture’s Position
The initial phase of economic reforms (1991-1995) primarily focused on liberalization, privatization, and globalization (LPG) in the industrial and financial sectors. Key measures included dismantling of industrial licensing, reduction of tariffs, and opening up to foreign investment. Agriculture, while not entirely ignored, received comparatively less attention. The focus was largely on removing input subsidies and reducing state intervention in agricultural markets, rather than on substantial investments in irrigation, infrastructure, or technology.
Growth Performance: A Comparative Analysis
The claim that agriculture has been bypassed is largely supported by growth data. Between 1991-92 and 2022-23, the average annual growth rate of agriculture and allied sectors was around 3.5%, while the overall GDP growth rate averaged around 6.5-7%. This significant disparity highlights the slower pace of agricultural development. Furthermore, the contribution of agriculture to India’s GDP has steadily declined from approximately 30% in 1991 to around 18.3% in 2022-23 (as per the National Statistical Office). This decline isn’t necessarily negative in itself, reflecting structural transformation, but the slow growth rate within the sector is a cause for concern.
Reasons for Agriculture Being Left Behind
- Inadequate Investment: Public investment in agriculture as a percentage of GDP has remained relatively low compared to other sectors. While there have been increases in recent years, they are still insufficient to address the sector’s long-standing infrastructure deficits.
- Limited Access to Credit: Small and marginal farmers, who constitute the majority of the farming community, often face difficulties in accessing institutional credit, forcing them to rely on informal sources with high interest rates.
- Poor Infrastructure: Lack of adequate irrigation facilities, storage infrastructure (leading to post-harvest losses estimated at around 16% annually – Source: Ministry of Food Processing Industries, 2020), and transportation networks hinder agricultural productivity and market access.
- Land Reforms: Incomplete land reforms have led to fragmented landholdings and insecure land tenure, discouraging investment in land improvement.
- Trade Policies: While trade liberalization has benefited some agricultural commodities, it has also exposed Indian farmers to global competition, particularly from subsidized agricultural products from developed countries.
- Focus on Cereal Production: The Green Revolution, while successful in increasing cereal production, led to a focus on a few crops (rice and wheat) at the expense of diversification towards higher-value crops.
Positive Impacts & Government Initiatives
Despite the criticisms, it’s important to acknowledge some positive impacts and government initiatives. The removal of restrictions on agricultural trade allowed for greater market integration. Schemes like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) aim to improve irrigation infrastructure, and the e-NAM (National Agriculture Market) platform seeks to create a unified national market for agricultural commodities. The introduction of the Farmer Producer Organizations (FPOs) is also a step towards empowering farmers and improving their bargaining power. The PM-AASHA scheme (Pradhan Mantri Annadata Awas Yojana) provides housing assistance to farmers.
Recent Trends & Emerging Challenges
Recent years have witnessed a renewed focus on agriculture, with initiatives like the Agriculture Infrastructure Fund (AIF) and the Farmer Distress Relief Fund. However, challenges remain. Climate change poses a significant threat to agricultural productivity, and the increasing frequency of extreme weather events (droughts, floods) is exacerbating agrarian distress. The three farm laws (repealed in 2021) sparked widespread protests, highlighting the need for greater stakeholder consultation and a more inclusive approach to agricultural reforms. The rising input costs (fertilizers, seeds, pesticides) are also putting pressure on farmers’ incomes.
| Sector | Average Annual Growth Rate (1991-2023) | Contribution to GDP (2022-23) |
|---|---|---|
| Agriculture & Allied Sectors | 3.5% | 18.3% |
| Industry | 6.8% | 24.6% |
| Services | 8.2% | 57.1% |
Conclusion
In conclusion, the assertion that economic reforms have largely bypassed agriculture holds considerable merit. While agriculture hasn’t been entirely neglected, it has undoubtedly lagged behind other sectors in terms of growth and investment. The initial focus on industrial liberalization, coupled with inadequate attention to agricultural infrastructure and farmer welfare, contributed to this disparity. However, recent government initiatives demonstrate a growing recognition of the need to prioritize agriculture. A sustained and holistic approach, encompassing increased investment, improved infrastructure, diversification, and climate resilience, is crucial to ensure that agriculture fully participates in and benefits from India’s economic growth story.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.