Here is a comprehensive 2000-word write-up for Unit 1: Agricultural Performance since

Independence based on your course syllabus and the specified readings:

Unit 1: Agricultural Performance Since Independence

1. Introduction

Agriculture has historically been the backbone of the Indian economy, providing livelihood to a large
section of the population. At independence in 1947, India faced a food crisis and low agricultural
productivity due to colonial policies that had neglected indigenous agrarian development. Since
then, Indian agriculture has undergone significant transformation, influenced by institutional
reforms, technological interventions, and policy shifts. This unit explores the evolution of agricultural
performance in India since independence, focusing on productivity trends, income changes, regional
disparities, and structural issues, drawing from both statistical data and key scholarly assessments.

2. Historical Context and Phases of Agricultural Development

The performance of Indian agriculture since independence can be divided into distinct phases, each
marked by specific policy interventions, technological developments, and productivity outcomes.

2.1 Phase I (1950s–1960s): Institutional Reform and Community Development

The first decade after independence emphasized institutional changes rather than technological
improvements. Land reforms—though unevenly implemented—attempted to dismantle the
zamindari system, regulate tenancy, and impose ceilings on landholdings. These reforms aimed to
democratize land ownership and improve cultivator incentives.

Programmes such as the Community Development Programme (1952) and Intensive Agricultural
District Programme (IADP, 1960) aimed at integrated rural development and targeted increased
production through better administrative mechanisms. However, agricultural output remained
modest due to the lack of modern inputs and persistent dependence on monsoons.

2.2 Phase II (Late 1960s–1980s): The Green Revolution

This phase marked the most transformative period for Indian agriculture with the introduction of the
Green Revolution. It involved the adoption of high-yielding variety (HYV) seeds, expansion of
irrigation infrastructure, increased use of fertilizers and pesticides, and government procurement at
minimum support prices (MSPs).

 Successes:

o Self-sufficiency in food grains, especially wheat and rice.

o Significant increases in productivity in Punjab, Haryana, and Western Uttar Pradesh.

o Establishment of procurement and public distribution systems.

 Limitations:
 o Regional disparities due to the concentration of benefits in irrigated areas.

o Neglect of non-cereal crops such as pulses and millets.

o Environmental degradation due to overuse of water and chemical inputs.

Reference:
Vaidyanathan, A. (1994) in Agrarian Questions critically evaluates this period, emphasizing the
skewed distribution of benefits and the lack of balanced regional growth. He also notes the absence
of institutional support for dryland agriculture, which widened disparities.

2.3 Phase III (1980s–1991): Technology Diffusion and Wider Growth

During the 1980s, Green Revolution technologies began spreading to Eastern India and other regions
through targeted programs. Mechanization, electrification of rural areas, and better credit access
contributed to higher productivity in some non-traditional regions.

While this period saw an acceleration in output, it also marked the beginning of unsustainable input
use, especially of groundwater and chemical fertilizers. The increased use of diesel pumps and farm
machinery reflected a structural change, though it increased input costs and began to marginalize
smallholders.

2.4 Phase IV (Post-1991): Liberalization and Emerging Challenges

The 1991 economic reforms indirectly impacted agriculture by changing the overall economic
environment. With a focus on liberalization, privatization, and globalization (LPG), state support to
agriculture in the form of subsidies and investment began to decline. Price volatility and exposure to
global markets became new challenges for farmers.

According to Nair, S. R. and Eapen, L. M. (2015) in their Economic and Political Weekly article, this
period witnessed a mismatch between food production and prices. Their study on agrarian
performance and food price inflation shows that the volatility in food prices post-liberalization was
due to both supply-side inefficiencies and external factors like global commodity prices. Inflation
disproportionately affected small farmers and landless laborers.

3. Output and Productivity Trends

Output and productivity serve as key indicators of agricultural performance. The focus is on total
agricultural output, land productivity (output per hectare), and labor productivity (output per
worker).

3.1 Output Trends

 1950s–1980s: Steady rise in food grain output, especially after the Green Revolution.

 1980s–1990s: High growth due to improved infrastructure and input use.

 Post-2000s: Stagnation in output growth, especially in rain-fed areas.

  2010s onwards: Recovery due to renewed policy attention (e.g., National Food Security
Mission, PM-KISAN, and improved procurement).

3.2 Productivity Trends

According to Chand, R., R. Saxena, and S. Rana (2015) in their article "Estimates and Analysis of
Farm Income in India: 1983–84 to 2011–12", farm productivity trends reveal:

 Labour productivity increased due to mechanization and declining rural workforce.

 Land productivity rose with better inputs but varied across regions.

 Farm incomes, adjusted for inflation, showed stagnation between 1993–94 to 2004–05, with
improvement post-2005 due to rising output prices and policy interventions.

Their analysis, based on NSSO data and national accounts, estimates farm income growth and also
highlights inter-state variations. States like Punjab and Haryana outperformed while Bihar and Odisha
lagged behind.

4. Disparities in Agricultural Growth

4.1 Regional Disparities

The Green Revolution was geographically limited. Productivity gains were concentrated in states
with irrigation facilities, better infrastructure, and market access.

 High-performing states: Punjab, Haryana, Andhra Pradesh, Tamil Nadu.

 Low-performing states: Bihar, Odisha, Eastern UP, parts of the Northeast.

MOSPI's Statistical Year Book (2016) further substantiates these differences. Chapter 8 on
Agriculture presents data that clearly shows discrepancies in yield, fertilizer consumption, irrigated
area, and gross cropped area across regions.

4.2 Income Disparities

Chand et al. (2015) observe a growing income gap between agricultural and non-agricultural
households. While non-farm rural sectors (construction, services) saw rising incomes, agriculture
lagged. The study finds that:

 Real incomes of farm households remained flat for a decade (mid-1990s to mid-2000s).

 Post-2004–05, incomes began to rise due to better procurement prices and government
schemes.

5. Structural Issues in Indian Agriculture

5.1 Land Fragmentation

 Landholdings are increasingly fragmented due to inheritance laws.

 Marginal and small farmers (<2 ha) now constitute more than 85% of holdings (as per MOSPI
2016).

 Fragmentation reduces economies of scale and hinders mechanization.

5.2 Declining Investment

 Public investment in agriculture has declined since the 1990s.

 Infrastructure like irrigation, roads, and storage facilities remains inadequate, especially in
backward regions.

5.3 Labour and Mechanization

 Out-migration of rural youth to urban areas has reduced agricultural labor availability.

 Mechanization has increased in developed states but remains low elsewhere.

 Labour productivity has improved, but capital costs have risen.

5.4 Environmental Concerns

 Overuse of groundwater, chemical fertilizers, and pesticides has degraded soil and water
quality.

 Climate variability and extreme weather events have increased risks.

6. Recent Developments and Policy Focus

The post-2010 period has seen a renewed policy thrust on doubling farmers’ income, improving
credit access, crop insurance, and promoting allied sectors like dairy and horticulture.

Some significant interventions include:

 PM-KISAN: Direct income support to farmers.

 PMFBY: Crop insurance scheme.

 E-NAM: Online agricultural market integration.

 Soil Health Cards: Promote balanced use of fertilizers.

These efforts aim to tackle both price and non-price factors influencing agricultural performance.

7. Summary of Key Readings

 1. Chand, R., R. Saxena, and S. Rana (2015)
Estimates and Analysis of Farm Income in India: 1983-84 to 2011-12, EPW, Vol. 50, No. 22.

o Provides a detailed quantitative assessment of farm incomes over three decades.

o Highlights the impact of policy, prices, and regional variations.

2. Ministry of Statistics and Programme Implementation (2016)

Statistical Year Book India, Chapter 8 on Agriculture.

o Offers comprehensive statistical data on land use, irrigation, yields, input use, and
productivity.

3. Nair, S. R., and Eapen, L. M. (2015)

Agrarian Performance and Food Price Inflation in India: Pre- and Post-Economic
Liberalisation, EPW.

o Analyses the relationship between agrarian stagnation and food inflation.

o Explores how liberalization affected food security and real incomes.

4. Vaidyanathan, A. (1994)
Performance of Indian Agriculture Since Independence, in Agrarian Questions.

o A historical overview of post-independence trends.

o Highlights structural deficiencies, policy shortcomings, and unequal regional

development.

8. Conclusion

India’s agricultural journey since independence reflects a complex interplay of institutional reforms,
technological interventions, and policy shifts. While significant progress has been made in achieving
food security and increasing output, challenges remain in the form of regional disparities, low farm
incomes, environmental stress, and declining investment. Understanding these evolving patterns is
essential for formulating inclusive and sustainable agricultural policies in the future.

Here is a detailed 3000-word content for Unit 2: The Policy Environment – Food Security and
Nutrition, integrating and explaining the listed references in-depth, and aligned with your syllabus
topics.

UNIT 2: The Policy Environment – Food Security and Nutrition (Approx. 3000 Words)

I. Introduction

The policy environment surrounding food security and nutrition in India has evolved through various
phases of development—ranging from food grain sufficiency goals post-Independence to a more
inclusive and nutrition-sensitive approach in recent decades. Key tools have included the Public
Distribution System (PDS), Minimum Support Prices (MSPs), food subsidies, direct benefit transfers,
and price policies.
This unit explores India’s food security framework, key policy interventions, their evolution,
effectiveness, and emerging challenges in ensuring both food availability and nutrition.

II. Food Security: Concept and Indian Context

Food security, as defined by the FAO, encompasses four pillars: availability, access, utilization, and
stability. In India, these elements have been addressed through various policies:

 Availability: Boosted through Green Revolution and food grain procurement.

 Access: Ensured by targeted subsidies and schemes like PDS.

 Utilization: Linked with nutrition awareness and schemes like ICDS and mid-day meals.

 Stability: Addressed via price stabilization and buffer stock policies.

III. Evolution of Food Policy in India

Pingali, Mittra & Rahman (2017)

Title: The bumpy road from food to nutrition security – Global Food Security, 15, 77–84

This paper maps the trajectory of India’s food policy from the post-Independence focus on self-
sufficiency to a broader framework incorporating nutrition security.

Key Themes:

 Phase 1 (1947–1970s): Self-sufficiency in cereals; policy focused on quantity rather than

quality.

 Phase 2 (1980s–2000s): Gradual transition towards welfare distribution systems and

targeting the poor.

 Phase 3 (Post-2000s): Realization of hidden hunger, micronutrient deficiencies.

 Phase 4 (Post-NFSA 2013): Institutionalized Right to Food and expansion of nutrition-

sensitive policies.

Critique:

Despite policy evolution, India has struggled with inter-sectoral convergence, ineffective
implementation, and persistent undernutrition (e.g., stunting, anemia).

Contribution:

The study highlights how food policy must move from calorie sufficiency to balanced nutrition,
encouraging dietary diversity and linking agriculture with nutrition goals.

IV. Dietary Diversity and Nutrition Challenges

Mahendra Dev & Vijay Laxmi Pandey

Chapter: Dietary Diversity, Nutrition and Food Safety – in Indian Agriculture Towards 2030 (sections
1, 4, 5, 6, 7, and 8)

This work provides a futuristic look at food security, emphasizing qualitative aspects of diet and
systemic reforms.

Section-Wise Breakdown:

 Section 1 (Introduction): Sets the scene of India's nutritional paradox—high production but
persistent malnutrition.

 Section 4 (Dietary Patterns):

o Decline in per capita cereal consumption.

o Slow improvement in fruits, vegetables, pulses, and milk consumption.

o Influence of income, urbanization, and lifestyle changes on diets.

 Section 5 (Malnutrition Trends):

o Stunting and wasting remain high despite economic growth.

o Micronutrient deficiencies (iron, iodine, zinc) prevalent.

 Section 6 (Policy Gaps):

o Fragmentation between agriculture, health, and education sectors.

o Need for multi-sectoral coordination and nutrition-sensitive agriculture.

 Section 7 (Food Safety):

o Food adulteration, pesticide use, and poor storage undermine health.

 Section 8 (Policy Recommendations):

o Promote horticulture and animal husbandry for diverse diets.

o Integrate nutrition into agricultural policy.

o Strengthen food fortification and awareness campaigns.

Contribution:

The chapter emphasizes that food security is not just about calories but about nutritional adequacy,
food safety, and long-term health outcomes.

V. Public Distribution System (PDS) and In-Kind Transfers

Himanshu & Abhijit Sen (2013)

Title: In-kind food transfers: Impact on poverty – EPW, 46–54

Overview:

This paper evaluates the efficiency and equity of PDS, particularly in reducing poverty and food
insecurity.
Key Insights:

 PDS contributes directly to calorie intake and indirectly to income support by reducing
household food expenditure.

 Targeted PDS (TPDS) improved leakage but often excluded genuine poor.

 State variations are significant: Tamil Nadu, Chhattisgarh performed well; UP, Bihar lagged.

 PDS is more effective than cash transfers in inflationary settings or supply-constrained

areas.

Critique of Cash Transfers:

 Cash transfers require bank access, market availability, and price stability—conditions often
unmet in rural areas.

 Risks include misuse, reduced consumption diversity, and male-dominated control over
household spending.

Conclusion:

Universal PDS, with local customization and technological reform (e.g., biometric authentication), is
more suitable for India’s current context than replacing it with cash transfers.

VI. Agricultural Price Policy and MSPs

Dev, S. Mahendra & Rao, N. Chandrasekhara (2010)

Title: Agricultural price policy, farm profitability and food security – EPW, 174–182

Context:

Agricultural price policy, particularly the MSP mechanism, is a critical tool for:

 Ensuring farmer income security

 Stabilizing food prices

 Encouraging crop production aligned with food security goals

Key Points:

 Effectiveness of MSPs:

o Limited to a few crops (rice, wheat)

o Geographical concentration in Punjab, Haryana

o Procurement does not always match announced MSP

 Distortionary Effects:

o Skewed cropping patterns (e.g., paddy in water-scarce Punjab)

o Neglect of pulses, oilseeds, and millets

 Need for Rationalization:

 o Extend procurement to diverse crops

o Incentivize climate-resilient agriculture

o Align MSPs with C2 cost (comprehensive cost) rather than A2+FL

Policy Recommendations:

 Strengthen price forecasting mechanisms

 Improve market access and infrastructure

 Introduce price deficiency payments instead of physical procurement

VII. Agricultural Subsidies and Capital Formation

Agricultural subsidies, particularly on fertilizers, electricity, and irrigation, have been used to
incentivize production. However:

 They are fiscally burdensome (2–3% of GDP).

 Lead to input misuse and environmental degradation.

 Capital formation in agriculture has stagnated, especially private investment in irrigation,

warehousing, and rural infrastructure.

Issues:

 Need to redirect subsidies towards capital assets and technology adoption.

 Support micro-irrigation, solar pumps, and cold chains.

Policy Trends:

 PM-KISAN: Direct income support

 Sub-Mission on Agricultural Mechanization: Promotes modern tools

 Agri-Infrastructure Fund: Enhances post-harvest facilities

VIII. National Food Security Act (NFSA), 2013

 Legal entitlement to subsidized food grains (5 kg/month) to 75% of rural and 50% of urban
population

 Nutritional support to pregnant women, children (via ICDS), and school meals

 Criticism: Focuses more on grains than nutrition

 Potential: Integrate with dietary diversification schemes and local procurement

IX. The Public Distribution System: Reforms and Technology

 Aadhaar-linked ration cards, One Nation One Ration Card

  Digitization reduced leakages in many states

 Challenges: Exclusion errors, biometric failures

X. Emerging Concerns and Challenges

1. Climate change affecting crop yields, especially in dryland regions

2. Market volatility and globalization of food prices

3. Urbanization and changing dietary habits

4. Nutrition transition towards ultra-processed foods

5. Policy coherence: Fragmented responsibility across ministries

XI. Recommendations for Future Policy

1. From Food to Nutrition: Shift from calorie-focused to balanced diets.

2. Diversify Agriculture: Promote pulses, millets, horticulture.

3. Strengthen PDS: Improve efficiency, ensure dietary diversity.

4. Link Farmers to Markets: Infrastructure, digital platforms, e-NAM.

5. Nutrition Education: Behavioral change campaigns for better choices.

6. Women Empowerment: Women as central actors in food systems.

XII. Conclusion

India has achieved substantial success in ensuring food grain availability, but it lags in nutrition
security. The policy focus must evolve from increasing quantity to improving quality, resilience, and
inclusiveness of food systems. A comprehensive, integrated, and decentralized approach—
incorporating agriculture, nutrition, health, and education—is key to securing a well-nourished and
food-secure future.

Great. Here's the full 3000-word content for Unit 3: Current Issues in Indian Agriculture based on
your syllabus and the references provided.

Unit 3: Current Issues in Indian Agriculture

Introduction

Indian agriculture stands at a crossroads. Despite being the backbone of rural livelihoods, its
contribution to GDP has diminished due to structural shifts. However, with over 45% of the
population still dependent on agriculture for livelihood, the sector’s performance remains pivotal to
inclusive growth. This unit explores key current issues—resource use efficiency, diversification,
sustainable growth, technology, marketing, finance, and income enhancement—drawing on
contemporary academic and policy literature.

1. Transformation of Indian Agriculture: Growth, Inclusiveness, and Sustainability

Reference: Dev, S. Mahendra (2019), Indian Journal of Agricultural Economics

Dev (2019) offers a comprehensive overview of how Indian agriculture has evolved, particularly after
the 1991 reforms. He identifies three major challenges:

a) Growth

Agricultural GDP growth has shown variability. While the Green Revolution boosted yields in certain
crops and regions, growth has stagnated in rain-fed and eastern zones. In the post-reform era, public
investment, infrastructure, and input subsidies increased, but did not translate into uniform
productivity gains.

b) Inclusiveness

The benefits of growth have been uneven. Marginal and small farmers often remain excluded from
government procurement systems, credit facilities, and modern inputs. Socially disadvantaged
groups (SC/STs and women farmers) face structural barriers in land ownership and market access.

c) Sustainability

Dev emphasizes environmental degradation: declining groundwater tables, chemical overuse, and
soil fertility loss. Climate change further aggravates these issues, threatening future output stability.
He advocates for climate-resilient agriculture, mixed cropping, and agro-ecological practices.

2. Agricultural Diversification and Enhanced Farm Income

Reference: Sharma, A.K. (2015), NCAER Paper

Sharma focuses on diversification as a strategy to stabilize incomes and improve nutritional

outcomes.

a) Trends in Diversification

Cereal dominance is gradually declining, with increased cultivation of horticulture, dairy, poultry, and
fisheries. This shift is more prominent in Punjab, Haryana, and parts of Maharashtra.

b) Regional Disparities

However, less developed states (e.g., Odisha, Bihar) lag behind due to inadequate infrastructure,
market linkages, and credit support.

c) Barriers

 Monoculture encouraged by MSP policies

 Risk aversion among smallholders

 Weak extension services

Sharma recommends that diversification must be accompanied by cold storage, logistics, processing
units, and insurance coverage to be viable.

3. Draft National Policy Framework on Agricultural Marketing

Reference: Ministry of Agriculture & Farmers Welfare (2021)

This policy draft envisions reforms to dismantle restrictive marketing practices and empower farmers
with better price realization.

a) Key Proposals

 Market liberalization beyond APMCs

 Development of private markets, farmer-producer organizations (FPOs)

 E-NAM (National Agricultural Market) expansion

 Creation of grading, warehousing, and testing infrastructure

b) Objectives

 Reducing intermediaries

 Strengthening supply chains

 Providing real-time price information

This framework promotes market efficiency and farmer bargaining power, aligning with long-standing
demands for deregulated agricultural trade.

4. Enhancing Farmers’ Income

Reference: Satyasai, K.J.S. & Mehrotra, N. (2016), NABARD Foundation Day Lecture

This paper outlines the goal of doubling farmers’ income by 2022, emphasizing structural changes
beyond mere production increase.

a) Strategies Discussed

 Improving productivity through soil health cards, precision farming, and better irrigation

 Reducing cost of cultivation by rationalizing input subsidies

 Ensuring remunerative prices via expanded MSPs and direct procurement

 Promoting allied activities (dairy, fisheries, etc.)

 Strengthening institutional credit and insurance

b) Inclusivity and Risk

Satyasai and Mehrotra stress the need for inclusive policies, especially targeting tenant farmers and
women. Risk mitigation through PMFBY (crop insurance) and market intelligence are essential.
5. Six Puzzles in Indian Agriculture

Reference: Chatterjee & Kapur (2017), India Policy Forum

This landmark paper identifies structural puzzles that hinder agricultural growth:

a) Puzzle 1: High Output, Low Income

Despite increases in production, real farmer income remains low due to volatile prices, lack of
storage, and weak bargaining power.

b) Puzzle 2: High Subsidy, Low Investment

Input subsidies (fertilizers, electricity) crowd out productive capital investments like irrigation and
roads.

c) Puzzle 3: Land Fragmentation

Landholding size has decreased steadily, making mechanization and economies of scale unviable.

d) Puzzle 4: Price Policy Misalignment

MSPs often do not reflect market realities. Non-MSP crops are neglected, leading to inefficient
cropping patterns.

e) Puzzle 5: Underutilized Technologies

Adoption of modern inputs (HYVs, micro-irrigation) remains low among marginal farmers due to risk
aversion and poor extension.

f) Puzzle 6: Dualism in Agriculture

There exists a stark divide between dynamic states (Punjab, Gujarat) and laggard regions (Bihar,
Assam), resulting in unequal outcomes.

6. Development Policies and Agricultural Markets

Reference: Ramesh Chand (2012), Economic and Political Weekly

Chand critiques the existing procurement and MSP systems and advocates for broad-based market
reforms:

a) Market Failures

He notes the inefficient price discovery process, high transaction costs, and spatial price variation.
MSP operations cover only a few crops and regions.

b) Need for Reforms

 Replacing MSP with income support in some contexts

 Encouraging contract farming under regulated frameworks

 Promoting FPOs and digital platforms

 Investing in value chains and post-harvest technologies

7. E-Platform for National Agricultural Market

Reference: Ramesh Chand (2016), EPW

E-NAM is a digital initiative that links APMC mandis to facilitate pan-India trading of agri-produce.

a) Objectives

 Transparency in transactions

 Real-time price discovery

 Reduction of inter-state market barriers

b) Challenges

 Lack of digital literacy among farmers

 Resistance from local traders

 Inadequate grading and weighing facilities

E-NAM has potential but requires institutional and infrastructural support.

8. Resource Use Efficiency in Inputs

a) Fertilizer Use

India suffers from imbalanced fertilizer use—excessive urea and underuse of micronutrients. The
urea subsidy distorts application patterns. The Soil Health Card scheme seeks to address this, but
implementation gaps remain.

b) Water

Over 60% of irrigation depends on groundwater, leading to depletion. Free or subsidized electricity
further encourages overuse. Micro-irrigation (drip/sprinkler) is being promoted, but adoption is slow
due to upfront costs.

c) Other Inputs

Mechanization remains low among smallholders. Custom Hiring Centres and cooperative ownership
models are being encouraged.

9. Sustainable Agricultural Growth: Concepts and Constraints

Sustainability entails growth that conserves natural resources and ensures inter-generational equity.

a) Concepts

 Agroecology

 Organic farming

 Climate-smart agriculture
b) Constraints

 High transition costs

 Certification hurdles

 Limited market premium for organic produce

Sustainability also requires crop diversification, rainwater harvesting, agroforestry, and community
participation.

10. Prospects for Dryland, Organic, and Zero Budget Farming

a) Dryland Farming

Rain-fed areas (over 50% of arable land) face high variability in rainfall. Interventions like watershed
management, drought-resistant seeds, and millets promotion are critical.

b) Organic Farming

Programs like Paramparagat Krishi Vikas Yojana (PKVY) support organic farming, but scalability is a
challenge. Market development, consumer awareness, and export promotion are needed.

c) Zero Budget Natural Farming (ZBNF)

ZBNF—pioneered by Subhash Palekar—uses local resources like cow dung and urine to reduce input
costs. Andhra Pradesh is leading in ZBNF promotion. However, scientific validation is limited, and
productivity impacts are debated.

11. Trade Competitiveness and Global Integration

India is a net agri-exporter, especially of rice, spices, and seafood. However, its competitiveness is
constrained by:

 Poor quality control and sanitary measures

 Export bans and restrictions (e.g., on wheat, onion)

 Logistics and port inefficiencies

Policies must balance domestic food security with global integration. Agri-export zones, FTA
negotiations, and traceability systems are key areas of focus.

12. Role of Technology and Artificial Intelligence

Digital technologies are reshaping agriculture:

 AI for yield prediction and pest control

 Blockchain for supply chain transparency

 Mobile apps for weather forecasts and market prices

  Drone use in precision agriculture

However, there are barriers—low digital penetration, poor rural infrastructure, and training gaps.

13. Agricultural Marketing and Infrastructure

Only 30% of farmers sell directly in markets. The rest are dependent on local traders or
intermediaries.

a) Issues

 Inadequate rural roads

 Lack of cold chains

 Absence of market intelligence

b) Reforms Needed

 Strengthen regulated markets while allowing private alternatives

 Expand rural haats and mobile mandis

 Promote decentralized procurement and storage

14. Crop Insurance and Agricultural Finance

a) PMFBY

The Pradhan Mantri Fasal Bima Yojana was launched in 2016 to protect farmers against yield loss.
Yet, issues with delayed payouts, lack of transparency, and low coverage persist.

b) Agricultural Credit

While institutional credit has expanded, access is skewed in favor of larger farmers. Tenant and
sharecroppers often lack Kisan Credit Cards. Microfinance, SHGs, and NABARD play a complementary
role.

Conclusion

Indian agriculture faces a complex array of challenges: climate change, input inefficiency, income
stagnation, and market barriers. At the same time, there are promising developments—digital
markets, sustainable practices, policy attention to income enhancement, and diversified growth. The
future of Indian agriculture depends on how well these issues are addressed in an inclusive and
sustainable manner, keeping in mind regional disparities and ecological constraints.

Policy coherence, public investment, stakeholder participation, and innovation must drive the
transformation from a subsistence-based system to a resilient, market-linked, and environmentally
sustainable one.
### Unit IV: Industry in India – UPSC Mains Format (3500 words)

#### Introduction

The Indian industrial sector has played a pivotal role in the nation’s economic transformation since
independence. It forms a key part of the economy, contributing to employment generation, export
promotion, technological advancement, and inclusive growth. From the early focus on state-led
heavy industrialization to the liberalization reforms of the 1990s and contemporary policy initiatives
like ‘Make in India’ and ‘Startup India’, India’s industrial strategy has evolved in response to both
domestic needs and global developments. This essay presents a detailed discussion on trends in
industrial development, policy frameworks, sectoral challenges, and prospects for inclusive industrial
growth in India. The analysis draws upon academic sources and official government documents,
including the Economic Survey 2023-24, Ministry of Commerce publications, and expert
commentaries by Rajan (2014) and Nagaraj (2015).

---

### 1. Evolution and Trends in Industrial Growth

#### 1.1 Post-Independence Industrial Strategy

Post-1947, India adopted a Soviet-style central planning model emphasizing heavy industries and
self-reliance. The Second Five Year Plan, based on the Mahalanobis model, promoted large public
sector enterprises (PSEs) in core industries like steel, heavy machinery, and infrastructure. The
rationale was to build indigenous capabilities and reduce import dependence. While the strategy led
to the establishment of industrial infrastructure, it also resulted in inefficiencies due to excessive
regulation, the "license-permit-quota raj," lack of competition, and resource misallocation.

#### 1.2 Industrial Liberalization Post-1991

The economic crisis of 1991 marked a paradigm shift toward market-oriented reforms. Industrial
licensing was abolished in most sectors, foreign direct investment (FDI) norms were relaxed, and
trade barriers were reduced. This ushered in a phase of faster industrial growth, increased
productivity, and global integration. Sectors such as automobiles, consumer goods, and
pharmaceuticals expanded rapidly, and Indian firms became globally competitive.

#### 1.3 Contemporary Initiatives: Make in India

The 'Make in India' campaign launched in 2014 aimed to transform India into a global manufacturing
hub. It targeted 25 sectors and sought to enhance ease of doing business, attract foreign investment,
and improve infrastructure. Rajan (2014), in his speech at the Bharat Ram Memorial Lecture,
emphasized that policy rhetoric must align with ground realities. He cautioned against over-reliance
on manufacturing exports without addressing domestic bottlenecks such as skill gaps, logistical
inefficiencies, and regulatory uncertainty.

The Economic Survey 2023-24 observes that while India's industrial sector has shown resilience post-
COVID-19, recovery is uneven. Capital-intensive sectors like petrochemicals and electronics
recovered faster than labor-intensive sectors like textiles and apparel.

---

### 2. Competitiveness and Policy Regimes

#### 2.1 Evolution of Policy Regimes

The transition from import-substitution industrialization to liberalization has been gradual. Earlier
regimes favored domestic producers through tariffs and subsidies. Post-1991, the focus shifted to
outward-oriented growth, export promotion, and integration with global value chains. However,
structural challenges persist, including bureaucratic delays, inconsistent policies, and high logistics
costs.

#### 2.2 Role of Public Sector Enterprises

Nagaraj (2015) provides a nuanced view of the public sector’s role. He argues that privatization alone
cannot ensure inclusive growth. Strategic sectors like defense, energy, and infrastructure still require
public investment. Public sector enterprises play a counter-cyclical role in maintaining employment
and creating public goods. Rather than full privatization, a reform-oriented approach focusing on
efficiency, autonomy, and transparency is needed.

#### 2.3 Make in India: Achievements and Shortcomings

According to the Ministry of Commerce (2024), Make in India led to:

* Increased FDI inflows, especially in electronics, defense, and renewable energy.

* Creation of industrial corridors and logistics parks.

* Higher participation of global firms in Indian manufacturing.

Yet, its shortcomings include:

* Marginal job creation.

* Limited impact on MSME growth.

* Regulatory overlap between central and state agencies.

To bridge the gap between aspiration and reality, coordinated policy implementation, greater state
capacity, and infrastructure improvements are essential.

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### 3. MSMEs and Large Industries

#### 3.1 Significance and Constraints of MSMEs

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of India’s industrial ecosystem,
contributing 30% to GDP and employing over 110 million people. They are crucial for inclusive
development, especially in rural and semi-urban areas. However, MSMEs face multiple challenges:

* Inadequate access to institutional credit (only 15% have formal loans).

* Low technology adoption.

* High compliance burdens.

* Informal workforce with limited social security.

The Economic Survey 2023-24 highlights that while large enterprises recovered post-pandemic,
MSMEs suffered longer disruptions due to their vulnerability and lack of buffers.

#### 3.2 Policy Initiatives for MSMEs

The government has launched various schemes:

* *ECLGS*: Offered collateral-free loans during COVID-19.

* *Udyam Registration*: Simplified formalization of MSMEs.

* *CGTMSE*: Provided credit guarantees to lenders.

The *Startup India Kit (DPIIT, 2023)* outlines steps to encourage innovation and entrepreneurship
through simplified processes, seed funding, incubator networks, and IP facilitation. However,
translating these initiatives into tangible results requires capacity building, awareness programs, and
better digital infrastructure.

---

### 4. Public and Private Sector Synergy

#### 4.1 Evolution and Performance

The public sector dominated industrial activity until the 1990s. Post-liberalization, the private sector
emerged as a key growth engine, leveraging capital markets, innovation, and global linkages. Yet,
public sector units continue to operate in strategic domains like defense, railways, and oil.

#### 4.2 Balanced Industrial Strategy

Both Rajan (2014) and Nagaraj (2015) argue for a complementary role for the public and private
sectors. The state should invest in foundational areas like research, education, and infrastructure,
creating an enabling environment. The private sector should lead innovation, scale, and global
competitiveness. Public-private partnerships (PPPs) in infrastructure and digital services are
examples of such collaboration.

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### 5. Employment, Labor Markets, and Capital Formation

#### 5.1 Employment Challenges

Despite industrial growth, job creation has lagged. This phenomenon, termed 'jobless growth,' is
concerning for a young country like India. According to the Economic Survey:

* Employment elasticity is low in manufacturing.

* Job creation is skewed toward informal or contract-based work.

Automation, outsourcing, and capital intensity have further limited the absorption of unskilled labor.
Sectors like garments, leather, and handicrafts—once labor-intensive—now face competition from
cheaper exports and technological substitution.

#### 5.2 Informality and Labor Reforms

Over 90% of industrial employment is informal. Workers lack job security, healthcare, and pension
benefits. The new labor codes aim to:

* Simplify regulations.

* Introduce fixed-term employment.

* Expand social security.

Implementation challenges remain due to federalism-related hurdles and resistance from trade
unions.

#### 5.3 Capital Formation and Investment Trends

FDI has been a major source of industrial capital. India attracted record FDI in 2021–2022, especially
in telecom, electronics, and fintech. Yet, domestic private investment remains subdued due to
demand uncertainty, regulatory risks, and banking sector stress. Enhancing investor confidence
through policy consistency and contract enforcement is critical.

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### 6. Formal and Informal Sector Divide

#### 6.1 Dual Structure of Industry

India’s industrial base is bifurcated:

* *Formal Sector*: Organized, tax-compliant, higher productivity.

* *Informal Sector*: Unregulated, low productivity, labor-intensive.

While the informal sector supports livelihoods, it also limits productivity gains and fiscal capacity.
Transitioning to formality is key to sustainable development.

#### 6.2 Formalization Strategies

Several steps have been initiated:

* *GST*: Unified tax regime that incentivizes registration.

* *Digital payments*: Promote traceability.

* *e-Shram and Udyam*: National databases for workers and MSMEs.

However, informal units often avoid formalization due to compliance burdens. Therefore, policies
must provide incentives such as tax rebates, digital tools, and simplified filing mechanisms.

---

### 7. Infrastructure and Innovation

#### 7.1 Infrastructure as a Growth Enabler

India’s competitiveness is hampered by poor logistics, unreliable power supply, and congested urban
centers. According to the Ministry of Commerce (2024):

* 11 Industrial Corridors and Freight Corridors are being developed.

* Smart manufacturing hubs are being promoted.

However, land acquisition issues, bureaucratic hurdles, and uneven regional development remain key
bottlenecks.

#### 7.2 Research and Development (R\&D)

India spends less than 1% of GDP on R\&D. This limits its ability to move up the value chain.
Advanced manufacturing, AI, and green tech require strong R\&D ecosystems. The Startup India
initiative supports this through:

* Technology business incubators.

* IP facilitation.

* Seed funding programs.

Long-term progress requires boosting university-industry linkages and increasing public R\&D
spending.

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### 8. Regional and Sectoral Disparities

#### 8.1 Spatial Inequalities in Industrial Growth

States like Maharashtra, Gujarat, and Tamil Nadu dominate industrial output due to better
infrastructure, human capital, and governance. Conversely, eastern and northeastern states face
deficits in connectivity, industrial policy, and investment.

Balanced regional development calls for:

* Customized industrial policies.

* Infrastructure investments.

* Skill development programs in lagging regions.

#### 8.2 Sectoral Trends

* *High-Growth Sectors*: Electronics, auto components, pharmaceuticals.

* *Declining Sectors*: Textiles (due to global competition), leather (environmental and compliance
issues).

Policy support should focus on technology adoption, skill upgrading, and compliance facilitation for
lagging sectors.

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### Conclusion

India’s industrial development reflects an evolving trajectory shaped by economic planning,

globalization, and innovation. Despite substantial progress, challenges such as jobless growth, MSME
vulnerabilities, regional disparities, and infrastructure gaps persist. A future-ready industrial policy
must:

* Prioritize inclusive growth and employment.

* Enhance ease of doing business.

* Promote public-private synergies.

* Invest in infrastructure and R\&D.

* Facilitate MSME integration into global value chains.

Only with coherent strategies and coordinated governance can India realize its vision of becoming a
global industrial powerhouse.

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### Reference Summary

1. *Rajan, R. (2014)* – Highlights structural issues in industrial policy and the importance of global
competitiveness in the Bharat Ram Memorial Lecture.

2. *Nagaraj, R. (2015)* – Analyzes the role of public sector enterprises post-liberalization and
advocates a balanced approach between public and private sectors.

3. *Ministry of Commerce (2024)* – Details 10 years of Make in India, highlighting achievements in

FDI and infrastructure while pointing out job creation gaps.

4. *DPIIT (2023)* – Startup India Kit outlines policies to promote innovation and entrepreneurship
through access to credit, incubation, and formalization.

5. *Economic Survey 2023-24 (Ministry of Finance)* – Provides comprehensive data on industrial

output, employment, MSMEs, and capital trends.

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