Agricultural Growth Deceleration in India: A Review of Explanations

Kiran Kakarlapudi ()

MPRA Paper from University Library of Munich, Germany

Abstract: Since the inception of economic reforms, Indian economy has achieved a remarkable rate of growth. This fantabulous performance, to a large extent, was driven by service sector and improvements in the secondary sector. However, this growth process bypassed the agricultural sector, which showed sharp deceleration in the growth rate (3.62 percent during 1984/85 - 1995/96 to 1.97 percent in 1995/96 – 2004/05). Given the relevance of the sector for employment and rural development the declining trend in agricultural growth has emerged as a major concern for researchers and policymakers. A large number of studies have enquired into the growth process of agricultural sector and has criticised the neo-liberal policy regime for a general neglect of the sector. The sector has recorded wide variations in yield and productivity and there was a shift towards cash crop cultivations. Moreover, agricultural indebtedness pushed several farming households into poverty and some of them resorted to extreme measures like suicides. In this context, the present paper reviews the performance of the Indian agriculture since reforms and compares it with pre-reforms conditions. A systematic and critical review of literature is presented to comprehend the poor performance of Indian agriculture. The review focuses on the pattern and determinants (price and non-price) of agricultural growth and evaluates the influence of policy and environmental factors on its performance. This paper exclusively explains the following objectives. To explain the growth of agriculture in terms of area, yield and cropping pattern and findings that have taken place in the recent past. To understand the determinants that contributes to the changes in the sources of growth. To explore the influence of the policy factors and natural factors, which lead to changes in the growth of agriculture? The study identifies that, in the post reform period there has been an increase in prices of cash crops and the cropping pattern changes towards non-food grains have a significant effect on growth. The review also concludes that much of the slowdown in agriculture is caused due to other pertinent factors such as infrastructure, technology and environmental factors, lack of political commitment and poor implementation of policies.

Keywords: Q10 (search for similar items in EconPapers)
JEL-codes: Q10 (search for similar items in EconPapers)
Date: 2010-10-13, Revised 2012-01-10
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