Page 156 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy

Notes rise to an unspectacular 0.4 percent in 2009-2010 with around 5.4 percent expected for 2010-11. Adjusted
for inflation, even this 5.4 percent growth looks unexciting when compared to the growth rates in
services and manufacturing. Today, agriculture accounts for 14.2 percent of the country’s gross
domestic product, compared to 51 percent in the 1950s. Worse, India is amongst the world’s largest
wasters of food and faces a potential challenge to provide food security to its growing population in
light of increasing global food prices and the declining rate of response of crops to added fertilizers.

Table 1 : Agriculture Sector : Key Indicators
(per cent)
S. Item 2008-09 2009-10 2010-11
No. (Advance Estimates)

1 GDP–Share and Growth (at 2004-05 prices)
Growth in GDP in agriculture & allied sectors -0.1 0.4 5.4
Share in GDP–Agriculture and allied sectors 15.7 14.6 14.2

Agriculture 13.3 12.3
Forestry and logging 1.6 1.5
Fishing 0.8 0.8
2 Share in Total Gross Capital Formation in the
Country (at 2004-05 prices)
Share of Agriculture & Allied Sectors in total
Gross Capital Formation 8.3 7.7
Agriculture 7.7 7.1
Forestry and logging 0.07 0.06
Fisheries 0.56 0.54
3 Agricultural Imports & Exports (at current prices)
Agricultural Imports to national imports 2.71 4.38
Agricultural exports to national exports 10.22 10.59

4 Employment in the agriculture sector 58.2
as share of total workers as per census 2001
Source : Central Statistics Office and Department of Agriculture and Cooperation.

The root causes of a poorly-performing agriculture sector that continues to be the primary engine for
sustaining the largest segment of the Indian people are primarily two-fold : (a) India’s economic
growth trends are not inclusive in character and are being driven more by services and manufacturing;
and (b) something has gone terribly awry with Indian planning for agriculture.
Conversely, for technology companies, those with the wherewithal to “green” Indian agriculture or
those who wish to engage at the grassroots either from a business or CR perspective, it is in agriculture’s
myriad problems that opportunities exist.
From the point of view of international investors some of the longer-term opportunities arise on
account of a number of factors including,
• India’s large land mass
• A multi-product basket with enormous export potential
• Year-round cropping

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