Agriculture has always been an important part of Indian Economic Development. With, almost half of the Indian Population dependent on Agriculture for their livelihood, this primary sector employment arena contributed 50% to India’s National Income. However, since the time of Independence, the contribution of agriculture and its allied activities to the National Income has reduced to 18%. Indian Sub Continent has seen a drastic shift, both in Agricultural Technology and Policies related to it since independence. Since, development of other industries and sectors is dependent on agricultural development; it continues to be dominant sector in Indian Economy.
Prior to independence, India was ruled by British Colonial Government which paid little attention on agricultural development of the nation. The agriculture system was primarily based on outdated technology, feudal land practices, that were the main reason for low productivity. Despite with mass population being involved in agriculture, output was low and thus a mass section of people were living under poverty. The production was mainly focused on Cash Crops with Indigo, Jute, Cotton and Food grains as major items of exports to Britain and other British Colonies.
However, post 1881, Colonial Government set up Famine Commissions and other organizations like Royal Commission (1926) and Imperial Council of Agricultural Research(1929), to find the cause of low output and to focus upon irrigation. However, with frequent famines, majorly the Bengal Famine and with Great Depression of 1930, productivity per hectare was substantially low. The growth rate of food grains from 1891-1946 was only 0.1%, while growth rate in all crops was 0.4%. This left farmers poor and exploited by money lenders.
Post Independence, India has shown extensive progress in Agriculture. The growth rate in Agricultural Sector is 2.6% as compared to 1% during pre-independence era. Post Independence, the initial task of the government was to modernize the agriculture, with development in technology to follow increase in agricultural productivity. Apart from yield increase, Indian agriculture has also progressed in structural changes. These developments were attributed to policies of Indian Government that include: Land Reforms, Price Ceiling for Farmers, Capital Investment in Agricultural Research and betterment of rural infrastructure for agriculture with extension of credit facilities to farmers.
However, during the WTO period, Indian Agriculture experienced decline in its progress with growth rate declining from 2.93% to 1.57%. The lack of available strategy for Agricultural Development at the time period of WTO was cited as the main reason for failure of development policy of Agriculture and reduced growth.
Thus, the ill effect of Economic reforms came into picture, where government intervention was reduced and further with deregulation, liberalization and exchange rate devaluation, agriculture sector was deeply affected. This forced the Indian Government to call for a New Agricultural Policy in year 2000. Under this policy, output growth was aimed at 4% per annum based on efficient use of agricultural resources and technology. This was for the first time in India’s Polictical History, that a special agricultural policy was launched.
Further, a mid term review of tenth Five Year Plan(2002-07) was focused to review the loss of growth in agricultural sector and its allied activities. Thus, some important policy initiatives were taken to ensure growth in Agricultural Sector. These included:
- Partial Decontrol of Fertilizers Prices
- Review of Agricultural Marketing Plan
- Relaxation of restrictions under Essential Commodities Plan, 1955.(
Globalization: Economic Impact
During early 1990’s Indian Economy in order to enhance the economy, witnessed, New Economic Policy in which Globalization was an integral part of policy making. An array of reforms were introduced to promote Economic and Social Development in the economy. The formation of New Economic Policy was important, citing crisis of 1991 when Inflation and Deteriorating Foreign Currency Reserve was threatening the economy.Some of the steps taken to liberalize and globalize our economy were:
- Disinvestment: To make the New Economic Policy a success, public sector enterprises were sold to private investors.
- Foreign Direct Investment (FDI): Direct investment of foreign investors was allowed in Insurance and Defence Sector.
- NRI Initiatives: Initiatives were taken to provide financial facilities to NRI’s to channelize investments into Indian Economy.
However, the post globalization reforms were also detrimental to Indian Economy:
- With the multinational culture prevailing in the economy, it is likely that these corporations might rule and have influence over the government.
- Also, with development concentrated to developed states, it is likely that gap between rich and poor will widen and there will be unfair distribution of wealth.
- Further despite new initiatives in Agriculture Sector, the contribution of the said sector is only 17% in India’s GDP.
Globalization reforms in India were not able to eliminate the gender- inequality in the form of male dominance in the country and thus earns a special mention in our discussion. Infact, the Globalization policies have widened gap between two enclaves. Depsite the economical development accompanied with Globalization reforms, even today women workers are mainly employed in unorganised or primary sectors. Their employment is confined to mining activities and export industries which reduce the foreign debt of the country by earning foreign exchange, stitching garments, packing finished materials, plucking tea leaves and sowing rice, working on construction sites etc. Thus, Globalization, has discriminated against the unorganised sectors, thus pushing the female gender farther to the margin. Post Globalization reforms in India were not able to eliminate the gender- inequality in the form of male dominance in the country and thus earns a special mention in our discussion. Infact, the Globalization policies have widened gap between two enclaves. Despite the economical development accompanied with Globalization reforms, even today women workers are mainly employed in unorganised or primary sectors. Their employment is confined to mining activities and export industries which reduce the foreign debt of the country by earning foreign exchange, stitching garments, packing finished materials, plucking tea leaves and sowing rice, working on construction sites etc. Thus, Globalization, has discriminated against the unorganised sectors, thus pushing the female gender farther to the margin.
The caste-based society disparity in India, continued to rule even after Globalization Reforms. A large majority of the Dalit Workers are still employed in agriculture, thus making the small farmers landless. Also in the urban areas, they work mainly in the unorganized sector. The increasing gap between Rural And Urban sector, with Urban Sector ruling the Indian Economy, it is likely that small farmers and labors are affected harshly. Thus, the tribal areas of India have also been forced to marginalized, post globalization period. Globalization has also added disparity among Indian States, with private investors concentrating only on developed states as they guarantees returns to them. Thus, Globalization has benefited only the big business men, professionals and youth living in metropolitan cities, which constitutes only 3% of Indian population. While, rural groups, Dalits, Tribal, Poor Peasants, Women etc have suffered. Thus, globalization in short have increased economic and Social Inequalities.
Recent Trends in Indian Industry:
Indian Economy owing to its rigorous economic and industrial policies have earned a competitive position in the world. The industry is on path of economic growth with annual GDP rising every subsequent year.
Post New Economic Policy, Indian industry has become more competitive. This has resulted into more production on account of less strikes, lock outs by the employees. Also with the era of skill development, employees are now educated and knowledgeable and thus rather focus on achieving harmony between their and organization objectives. Employees know they have duties to survive in cut throat competition and also employers know they value of human resource management as even few hours of production halt can lead to humongous losses.
New Entrepreneurs and Dynamics:
Earlier Indian Industry was known for Management clashes, Trade Unions but now with recent changes in Industry Outlook, focus is on Consumers and Community.
Trade unions are increasingly getting isolated and now the past members of trade unions are making alliances with the interests of society, consumers and community.
As a result of favorable Industrial Trends and Policies, Indian Industry have gained respect in Global Arena and following statistics validate our conclusion:
- Gross domestic product (GDP) of India is expected to be 6% during 2013-14. This is better than other nation struggling to come out of Global Financial Crisis.
- Forex Reserve of the nation has increased to $296.57 Billions to support the currency.
- During 2012-13, FII were at $22 Million, a record inflow of foreign capital since 1993.
- The Reserve Bank of India (RBI) has relaxed external borrowing norms for infrastructure finance companies. Now the companies are allowed to borrow up to 75% of the company’s net worth without approval of RBI.
In terms of Global Presence of Indian Industry, Indian Industry has earned a special place in Global Arena. Companies are looking abroad to acquire new customer base, acquiring new technologies and creating new products to enhance their position in Global Market.
** However, recently the Indian Economy have experienced currency depreciation and huge outflows of capital from capital market because of downgrade in their credit rating by Rating Agencies
Bhardwaj, S. (n.d.). What R the Recent Trens in Industrial Relations in India. Retrieved August 17, 2013, from Cite HR: http://www.citehr.com/41352-what-r-recent-trends-industrial-relations-india.html
Globalisation. (2008). Retrieved August 17, 2013, from Trade Chakra: http://www.tradechakra.com/indian-economy/globalization.html
Minstry of External Affairs, Government of India. (2013, January 14). Economic Snapshot. Retrieved August 17, 2013, from India in Business: http://indiainbusiness.nic.in/economy/economic_snapshot.htm