Mounting Agricultural Stress In India

The Indian agricultural sector was adequately focused in the first Five Year Plan and its performance was impressive.

- Kishore Kumar Biswas

But the second Five Year Plan emphasised industrial development under the stewardship of P C Mahalanobis. The plan emphasised establishment of heavy industries and decided to take foreign technological and financial aid. The target was to make the Indian economy industrially self-sufficient. The same focus continued in the third Plan and thereafter.

The agricultural model that India followed at that time was different from the situation now. The government expenditure in the sector was considerable. The agricultural sector in India is mainly a state subject. But the central government had a big role to play in those days.

During the tenure of Indira Gandhi, the agricultural sector got much needed stability. In that period, subsidised fertilisers and pesticides and other subsidised inputs like irrigation and seeds were offered to aid the growth of this sector. On the demand side, the government itself purchased big amounts of agricultural outputs like paddy, wheat and many other cereals like pulses and oil seeds at Minimum Support Prices (MSP).

Other important agricultural products such as sugar and jute were also procured by the government at MSP rates. The government used a portion of this agro produce in the Public Distribution System (PDS) and the remaining portion was stored as buffer stock for food security. Therefore, the supply of and demand for agricultural products were matched in the Indian economy. This system continued till the implementation of the New Economic Policy (NEP) in 1991-92.

Agriculture under NEP