Primary Sector and Growth

Primary sector is of prime importance to the Indian economy and without rapid growth of this sector the impending targets of higher growth rate of the economy cannot be achieved. Give arguments For and Against this view. With a growth rate of less than 2 per cent during 2008-09, the agriculture sector neither offers any cheers to the farmers nor to the economy as a whole. With the target for growth rate during Eleventh Five Year Plan being fixed 8 per cent, the below par achievements in the primary sector are apprehended to act as dampeners. Many believe that without rapid growth in primary sector it may not be possible to achieve the hyper growth targets in the coming years. Arguments For the View (a) Indian economy has been growing rapidly in the post reforms era. But except for a few exceptionally good years like 2000-01 and 2003-04, the growth rate of the agricultural sector has been very low, at around 2 to 3 per cent per annum. To hike the overall growth rate of the economy, the primary sector has to improve its performance. (b) More than 60 per cent of the total labour force in the country is engaged in the farm sector operations. With such a huge proportion of population experiencing increase of just around three per cent in their income levels, the overall growth rate of the economy also tends to get suppressed. (c) It is well-known that the farm productivity in the country is among the lowest in the world and there is a vast scope for increasing the same. Any substantial increase in the productivity of this vital sector would result in overall high growth rate of the economy. (d) The years in which the agricultural sector has not performed well have witnessed lower growth rate of the economy. Hence, it is imperative that the primary sector does well. Arguments Against the View (a) In India, agriculture is largely dependent on monsoons. Under such a scenario, it is wrong to expect the farm sector to grow at par with the industries or the services sectors. The government knows this reality well and has been focusing on rapid growth of those sectors which have high growth potential. (b) Indian agriculture is primitive in nature and employs old technology and lesser capital. With these features, the agricultural sector is likely to continue with its current low growth rate trend and the attempts to boost up the growth rate of the economy have to be without the agriculture sector changing much. (c) With services contributing half of the national income at present, it is better to rely on this

sector for sustaining the higher growth of the economy, rather than putting efforts in the primary sector without results.