India s Agricultural Dynamics-Weak Link in Development

Weak Link in Development Shashanka Bhide K P Kalirajan R T Shan d There has been a growing concern on the performance of agricultural sector in recent years. The regional balance in growth has also been a matter of interest both in policies and academic discussions. The central budget speeches in recent years have noted the need to accelerate agricultural growth as it has been slower growth than the growth of the other sectors. The declining real public investment in agriculture has also been cited with concern given the implication of such trends to agricultural growth. It is useful to examine the longer-term trends in agricultural growth to place in perspective the more recent trends. This paper is an attempt to assess the trends in agricultural output both at the national level and the state level. The study shows that there are strong cyclical patterns in the growth trends and there is evidence of convergence of the growth rates at the state level in the shorter intervals of time. But in the longer term, the state level growth rates converge to different levels. Thus, the concerns regarding slower rate of growth at the overall level and the divergent growth pattern of the states are well founded. Unless there are policies which strengthen the investment climate in agriculture, by operating on both the supply and demand factors, the slower growth at the national level and the consequent state level imbalances would continue.