Page 135 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 11: Sectoral Performance I: Agriculture: Growth Productivity Trends and Crop Patterns

in private investment in agriculture — from 70% to 82%. The rising trend in private investment Notes
probably reflects the improved incentives for agriculture and favourable change in the trade
policy.
Table 9 : Gross Investment in Agriculture
( `` `` ` Crores) (at 1980-81 prices

% Share
Year Public Private Total Public Private
1960-61 590 1,080 1,670 35
1970-71 790 1,970 2,760 29
1980-81 1,800 2,840 4,640 39
1990-91 4,400 10,440 14,840 30
1999-00 6,670 41,480 50,150 17
2004-05 23,039 86,967 1,10,006 20
2008-09 24,452 1,14,145 1,38,597 18
2009-10 NA NA 1,33,377 NA NA

Note : 1. The figures for 2004-05 onwards are based 2004-05 prices.
2. The figures given by the Government of India guesstimates. Figures from 1960-61 to 1980
are based on 1980-81 prices. Figures for 1990 and subsequent years are based on 1993-94.
Hence, these figures are not really comparison.
Source : Economic Survey 2004-05. Agricultural Statistical at a Glance (2007), Central Statistical
Organisation.
The worrying aspect is that private investment in agriculture is almost completely concentrated
in northern regions particularly Punjab, Haryana and Western Uttar Pradesh and almost
completely absent in out parts of the country.
Public investment, on the other hand, is a disappointment. After showing an uptrend in the
seventies, public investment in real terms (i.e. in 1980 prices) has generally declined — probably
due to division of resources from investment to current expenditure in the form of increased
inputs and input subsidies.
The share of agricultural sector’s capital formation in GDP declined from 1.92 percent in the
early 1990 to 1.28 per cent in the early 2000s. This was real disturbing. This decline was really due
to decline stagnation in public investment in agriculture since the middle 1990s. This has
improved to 2.12% in 2006.
(iv) Failure of Land Reforms : Till the middle of land the 1970s the Government hoped to implement
reforms, specially tenancy legislation and ceiling on land holdings. The Government failed to
implement the land reform measures and there was very little of and redistribution in favour of
marginal farmers and landlords labourers or protection of tenants from exploitation from
eviction. The Government reconciled itself to failure to push forth progressive land reforms
and shift the emphasis to technological changes. Since the Seven Plan, for instance, there is no
mention of land reforms. The bitter conflict between landlords and the landless Bihar, Andhra
Pradesh and other states - the rape expansion of the Naxalite movement—is in the result the
failure to implement land reforms.
(v) Growing Exploitation of the Tenants : From the very beginning, the growth prospects of Indian
agriculture were vitally dependent on the role of public investment in irrigation, drainage and
flood control, in land shaping and land consolidation, in prevention of soil erosion and salinity,
in the development of a widespread research and extension network and in rural electrification
and provision of institutional credit. But technological change is not a substitute for institutional

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