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Indian Economic Policy

Notes Thus, any change in the agricultural sector positive or negative—has a multiplier effect on the entire
economy. The agricultural sector acts as a bulwark maintaining food security and in the process,
nation security as well. Recognising the crucial role played by agricultural sector in enabling the
widest dispersal economic benefits, the Tenth Plan emphasised that agricultural development is
central to rapid economic development of the country.
The unfortunate thing is that most of the economic plans failed continuously to achieve agricultural
target. In fact, agricultural development has always been given lower priority at the expense of
industries and service sectors.
Progress of Agriculture under the Five-year Plans

On the eve of the First Plan (1951-56), agriculture was in a hopeless and deplorable condition. Our
farmers were in heavy debt to the village money-lenders. They were having small and scattered
holdings. They had neither the money nor the knowledge to use proper equipment, good seeds and
chemical manures. Except in certain selected irrigated areas, they were dependent upon rainfall and
upon the vagaries of the monsoons. Productivity of land as well as of labour had been declining and
was generally the lowest in the world. In spite of the fact that over 70 per cent of our working population
was engaged in cultivation, the country was not self-sufficient in foodgrains but had to depend on
imports of foodgrains. Besides, the partition of the country in 1947 worsened the agricultural situation,
as India was allotted more people but less land to support them.
Objectives of Economic Planning for the Agricultural Sector

While planning to develop the agricultural sector, the Planning Commission has generally kept four
broad objectives in view :
(a) Increase agricultural production : The aim has always been
(i) to bring more land under cultivation,
(ii) raise the per hectare yield through intensive application of such agricultural inputs as
irrigation, improved seeds, fertilisers, etc. and thus
(iii) bring about increased agricultural production.
(b) Increase employment opportunities : Apart from increase in production, the agricultural sector
has to generate additional employment opportunities and provide scope for increasing the
incomes of the poorer sections in our villages.
(c) Reduce the pressure of population on land : Another basic objective of planning in the
agricultural sector has been to reduce the number of people working on land, on the assumption
that there are too many people working on land. The surplus labour on land should be shifted
to secondary and tertiary sectors, preferably in rural and semi-urban areas.
(d) Reduce inequality of incomes in the rural sector : The Government should remove the
exploitation of tenants, and should distribute surplus land among small and marginal farmers
in such a way that there would be some degree of equality and justice in the rural areas.
All these four objectives are generally followed in all our five year plans but in practice,
agricultural planning in India has come to mean increase in agricultural production, viz., the
achievement of the first objective; all other objectives have either been ignored or given lower
priority.
Strategy used in the Agricultural Sector

To bring about increase in agricultural production and also increase in rural employment, the Five
Year Plans use various programmes such as : setting up of community development programmes
and agricultural extension services throughout the country, expansion of irrigation facilities, fertilisers,
pesticides, agricultural machinery, high-yielding varieties of seeds and expansion of transportation,
power, marketing and of institutional credit.

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