Role of Agricultural Development in the National Economic Growth

Now let us discuss with the role of agricultural development in national economic growth. The importance of agriculture in India emerges from the fact that the development in agriculture is essential necessary condition for the development of the national economy. Ragnar Nurkse argues that the excess population in agriculture should be moved to the newly started industries. Nurkse’s thesis is that agricultural productivity will be enhanced on the one hand and on the other latest industrial units would be established with the use of surplus labour. The Nurksian thesis, though broadly welcomed at one time, has been questioned currently:

(a) Industrialisation does not comprise only of shifting of workers from agriculture to industries. It needs a specific set of motives and values which an agricultural economy cannot supply. A change in agriculture itself is necessary before these motivations and values are evolved.

(b) The marketable agricultural excess will have to be increased substantially to feed the growing urban population and to offer raw materials to industries.

(c) New uses have been found for food grains and other agricultural crops. With fossil oils becoming progressively expensive, ethanol is being utilised as an alternative fuel. Com, sugarcanes, beetroot and other crops are progressively converted into ethanol and alcohol.

(d) The new industries and the rapidly growing services sector, however fast they may develop, they will not be able to offer sufficient employment for the ever-growing millions in India. There is a limit to the capacity of employment in industries in the short duration. Necessarily, hence, increased employment will have to be discovered in agriculture and in rural industries.

Example: During 2002-03, failure of the agricultural sector spelt disaster to the whole planning process.

Hence, any change in the agricultural sector-positive or negative-has a multiplier effect on the whole economy. The agricultural sector serves as a bulwark in maintaining food security and in the process, national security as well. Identifying the crucial role played by the agricultural sector in facilitating the widest dispersal of economic benefits, the Tenth Plan laid stress that agricultural development is central to quick economic development of the country.

Caution: Rapid economic development will require rapid agricultural development either to precede or to go hand in hand with it. Indian planners learnt a bitter lesson during the Second and Third Five-Year Plan periods and in recent years.

You must note that the unfortunate thing is that majority of the economic plans failed constantly to achieve agricultural targets. In fact, agricultural development has always been offered lower priority at the cost of industries and service sectors.

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