Indian Agriculture

The agricultural crisis of the mid-1960s triggered by the severe droughts of 1965–6 and 1966–7 compelled policy makers to appreciate the strategic significance of agriculture in a poor industrialising economy. The need to assure food security led to the stress on agricultural growth, which was also seen as a means to remove poverty and ensure growth with social justice. There were still other concerns. Public investment is required to realise these aims. Public investment supplies the necessary infrastructure, including irrigation, research and extension, power, and transportation, to mobilise the growth potential of the agriculture sector. From the Fourth Five-Year Plan there was an emphasis on the Green Revolution, a technology-led growth process with an emphasis on the adoption of high-yielding varieties of wheat and rice with price subsidies and investment policies. A separate sub-strategy of institutionalising credit support through the banks to support the agricultural growth strategy was a critical plank of this policy. The insufficiency of resources devoted to agricultural growth in the first three Plans came into sharp focus with the food crises and dependence on US PL 480 imports. The focus of the new agricultural strategy changed to a concentration on increasing the use of new inputs, supported by subsidised finance through the banking system and procurement prices.

Centrality of Agriculture in the Indian Economy

The Indian economy is largely agrarian; the importance of agriculture hardly needs to be emphasised.