CORE STRUCTURE OF

INDIAN ECONOMY
MODULE-2
 INTRODUCTION

Economy: It works on transactions.

It consists of the production ,distribution or
trade of goods and services in certain region
or country.
 Sum of all transactions taking place in an
area regulated by govt.
Transactions happening with in India is Indian
Economy.
 FEATURES OF INDIAN ECONOMY

 Excessive Dependence on
Agriculture(Primary Sector)
 Low Per capita Income
 Population Growth
 Under-employment and Un-employment
 Inequality:- In Wealth Distribution
 Low level of Technology.
 Lack of Infrastructure.
 Poor quality of human capital.
 Under-Utilization of Resources
 ECONOMIC ENVIRONMENT
• Economic Env is a Environment in which businesses
operation that is dependent on the sum total of
economic factors.
• Economic factors includes employment, inflation,
interest rates, consumer behavior.
• All economic factors have effects on the economic
envn , which in turn affects the business markets.
• Business depends on the economic env for all inputs
and sell the finished goods. It is totally dependent
on Eco Env.
 ECONOMIC FACTORS

DEMAND AND SUPPLY

MARGINAL AND TOTAL UTILITY

MONEY AND BANKING

INCOME AND EMPLOYMENT

MARGINAL AND TOTAL UTILITY

ECONOMIC GROWTH AND DEVELOPMENT

GENERAL PRICE LEVEL

TRADE CYCLE
 DEMAND AND SUPPLY
The main factor that influence operations of business
org are demand and supply.
• Demand : Need and capability of consumers to
purchase a product.
• Supply :Ability of the business to fulfill the
consumer’s demand.
• The demand increased for a product results in more
profit and vice versa. Therefore the company has to
plan better strategy.
Eg Sanitizer
 MARGINAL AND TOTAL UTILITY
• Utility is satisfaction that is derived by a person from the
consumption of any goods and services.
• Total Utility is overall satisfaction that a consumer derives
from the consumption of particular goods and Services
• Marginal Utility is quantify the amount of satisfaction that
is gained by the consumption of additional units of goods
and services.
• If the similar units are consumed at constant & successive
basis the level of satisfaction decreases, which leads to
decrease in sales & business orgn has to plan for launch of
new product.
 MONEY AND BANKING
 Increase in interest rates also impacts business
especially business providing loans.
Eg: Houses and car loans
 This is why banks also started advertising.
ECONOMIC GROWTH AND DEVELOPMENT

• Earnings of and individual in the Society and

increase in National income is Economic
growth. Refers to increase in the real output
of goods and services in the Country.
• Amount of funds invested in the enhancement
of the society is ED.It includes changes in
social, cultural, political as well as economic
changes in the Country
 INCOME AND EMPLOYEMENT

 Employment and money increases buying

capacity
Income is the total earning of an individual or
family. Their is a relationship buying habits and
individual income.
Eg: High Income and Low income
Entertainment Necessity for living
Car Education of children
Branded Goods Basic needs
 GENERAL PRICE LEVELS /INFILATION
RATE
• Fixing the price of the product the elements
needs to considered are Raw
material,labour,transport etc
• TRADE CYCLE
Peak,recession,depression,recovery
• MARKET SIZE
Profit margin of the orgn depends on market
size. Eg: Inhalers.
 NEW ECONOMIC POLICY
• Speed up the development of the
country
• To remove the economic difficulties like
poverty, poor infrastructure, low
industrial production etc.
• Factors responsible for economic
reforms
Fall in foreign exchange reserve
Failure of public sector
High fiscal deficit
Deficit in balance of payment
Rate of inflation also increases
In order to eliminate the situation of crises from
Indian economy Prime Minister P V Narashima
Rao and Finance Minister Dr.Manmohan Singh
introduced New Economic Policy 1991.
It Includes
 Liberalization
 Privatization
 Globalization
• The set of policies introduced by the
government is placed under 2 different groups
(Popularly known as measures as new economic
policy)
 Stabilization Measures
It refers to short term measures which aim at
correcting the deficit in balance of payment and
controlling the information.
Structural reforms measures
It refers to long term measures aims at
improving the efficiency and increasing the
international competitiveness.
ELEMENTS OF NEW ECONOMIC POLICY
Liberalization
 The removal of entry and growth restrictions
on private sector enterprises or removal of
trade barriers is known as liberalization.
 Before 1991, government imposed many
restrictions on private enterprises which
restricts them to take risk or to get indulge in a
big project.
According to the policy of 1991, the government tries
to remove such barriers so that the private sector of
the economy shall grow
In order to get liberalized government introduced
 Industrial Sector reforms
 Financial sector reforms
 Fiscal reforms
 Foreign exchange reform
 Trade investment policy
 Industrial Sector reforms
• Govt had 17 licensees under sec A 1956 & reduced from 17 to
3(Railways,Autonomy,defence)
• Monopoly restrictive trade policy act 1970(MRTP)
• Freedom to import capital goods
 Financial sector reforms
• Establishment of private sector bank
• Changing the role of Reserve bank of India
• Foreign Investment limit in banks was increased upto 51
percent .i.e foreign investors are allowed to invest in Indian
financial markets
• Ease of expansion
 Fiscal reforms or tax reforms
• Changes in Govt taxes and public expenditure and
policies
• Reduction in Direct taxes- To promote savings and
voluntary disclosure of income
• Reduce the rate of indirect tax- Common market for
goods and services can be established.
• The process of taxation is also simplified
 Foreign Exchange Reform
Eg:1$ = --------Rs
• This was introduced to bring stability in import and export and
reduce crises of balance of payments.
• Devaluation of Rupee- Decrease the value of domestic currency
• https://www.google.com/search?
q=devaluation+of+rupee+in+kannada&rlz=1C1VDKB_enIN1018IN
1018&oq=devaluation+of+rupee+in+kannada+&aqs=chrome..69i
57j33i160l4.10167j0j7&sourceid=chrome&ie=UTF-
8#fpstate=ive&vld=cid:3d41d935,vid:1kviLiwxW7A
• Adopting flexible exchange rate system
• https://www.youtube.com/watch?v=tfLd329ovRI
 Trade and Investment reforms
• Heavy tariff was implemented by the govt to protect
domestic industries .
• But this reduced efficiency and led to slow growth of
economy.
• In order to boost govt implemented this reform which
includes
Removal of export duty
Reduction of import duty
Import licensing was abolished (Except in case of hazardous)
 PRIVATIZATION
• The transfer of ownership right from public sector
undertaking to private sector undertaking is know
as privatization.
• Contraction of Public sector
Under the new economic policy the number industries
reserved for the public was reduced from 17 to
3( except automic,railways and defence)
• Govt companies have been sold by central govt to
private capitalist which were incurring losses in
1991.
Privatization of public sector undertaking by
selling of part of equity to the public
• The govt has also attempt to improve the
efficiency of PSUs by giving them additional
power and freedom to enter joint venture,
raise debts etc.
• The govt has listed 9 public sector undertaking
with the name of “Navarathna Companies”.
 GLOBALIZATION
• The integration of domestic economy with world economy is
known as globalization , making the world on market.
• Eg Dominos, Mc D, Cococola.
• It is the process of international integration arising from the
interchange of world views , products, ideas and mutual
sharing and other aspects of culture.
• Outsourcing
• A Company hires regular services from external sources which
was supposed to be provided internally.It is an outcome of
globalization.It became a major source for outsourcing jobs
because of New economic Policy.
• Eg:BPO, Banking Services etc
WTO(World Trade Organization)
It was established to administer all multilateral
trade agreements by providing equal
opportunities to all countries in the international
market for trading purpose.India has been an
active member of WTO which aims to enlarge
trade between countries.
 MAKE IN INDIA
INTRODUCTION
• Make in India is an initiative of the Govt of India to
encourage multi-national, as well as domestic
companies to manufacturing their products in India. It
was launched by Prime Minister Narendra Modi on 25 th
September 2014.
• The main Motto of the Govt of India is to invite business
entities from all over the world to invest in India
manufacturing industry. For this GOI is trying to simplify
the rules & regulations to invite investment form foreign
investors.
 Objectives

 The main objective behind the initiative is to

focus on job creation and skill enhancement in
25 sectors of the economy.
 The initiative also aims at high quality
standards
The Initiative hopes to attract capital &
Technological investment in India.
 The Sectors include
• Automobiles,Aviations,Biotechnology,Chemica
ls,Construction ,Defence Manf, Electrical , IT
Leather,Media,Mining,Oil& Gas , Textiles,
Roads and highways.
 INITIATIVES
 New Infrastructure
Active on developing industrial corridors and Smart cities.
A New “ National Industrial Corridor Development
Authority” is being created to
co-ordinate,integration, monitor and surprise development
of all industrial corridors.
• Delhi-Mumbai industrial corridors
• Chennai-Bengaluru Industrial corridors
• East coast Economic corridors
• Amritsar- Kolkata Industrial Corridors
 Nurturing Innovation-Approval obtained for strengthening
intellectual property regime in the country through
• Further up gradation of IT Facilities
• Application processes made online
• Compliance with global standards.
 Skill Development
• Through Indian leather development programme
• Funds released for establishment of 4 new branches of
footwear Design &Development institute at
Hyderabad,patna,Punjab& Gujarat.
 Foreign Direct Investment
• India is already one of the fastest growing economies of
world.
• Top three attractive destinations for inbound investments.
• Here the terms has been consistently eased to make it
investor-friendly
 Intellectual property
• Several initiatives to create a conducive environment for the
protection of intellectual property rights of innovations and
creators by bringing about changes at legislative & policy
level.
 IS MAKE IN INDIA A SUCCESS
• Samsung will manufacture samsung z1 in India
• Huawei will invest 170 million dollars to set up
R& D center in India
• Mobile manuf spice will setup manufacturing
facility in UP with an investment of Rs.500
crore
• https://www.makeinindia.com/policy/new-
initiatives
 IMPLICATIONS
• Make in India is projecting a in manufacturing at the rate of
14% for the next 8 years, GDP is expected to grow at the 8.4,
which means what ever we are producing cannot be
consuming at ourselfs, So we need to produce for the world
market more than what we are doing today.
• As a result a quality of our products have to be better & as
per global standards, better quality, better design,
engineering.
• Lot more investment has to go into manuf than what is
happening today. Investment goes in when returns comes.
Therefore manufacturing has to guarantee consistent &
superior returns like what is guarantee so far.
GENERATIONS OF ECONOMIC REFORMS
• Liberalization Globalization, and Privatization (LPG reforms) in
1991, which was mainly aimed to liberalize the Indian Economy
and fuel economic growth.
• India was driven by balance of payment crises This is because
India needed urgent funds to cope up with the crisis, which India
got from the International Monetary Fund (IMF), however, these
funds were given on a condition. And these conditions ultimately
led to the LPG reforms and further fueled the Second Generation
Reforms.
• India undertook the economic reforms of Liberalization,
Privatization, and Globalization. And these reforms, initiated in
1991 and lasted till 2000, were considered the First Generation
Economic Reforms.
 SECOND GENERATION REFORMS

• These reforms were indeed successful, but however, didn’t achieve the
desired results.. So, the Second Generation Reforms were introduced in
the country in 2000-2001.
• The main features of the Second Generation Reforms were-
1.Deregulation and Liberalization
• Under this, the Government abolished the policy of Administered Price
Mechanism (APM), and ultimately deregulated and liberalized the prices
which were earlier regulated and fixed by the Government under the
Administered Price Mechanism. This step, taken by the Government was
considered the ‘backbone’ for the success of the economic reform
process of India.
• The main products whose prices were regulated by the Government
included petroleum, sugar, drugs, fertilizers, etc
• Eg Petroleum
• 2. Critical Sector Reforms
• The main focus in the critical sector reforms was the infrastructure reforms, the main
components in the infrastructure sector included roads, telecom sector, and power.
And under this, the State Governments played an important role in these economic
reforms, with the Central Government playing a supportive role. So, it was the State
Governments that initiated new measures for these reforms.
• Another major focus was on agriculture. Numerous agriculture reforms were initiated
such as research and development in agriculture. Until the second-generation reforms,
it was the government that facilitated the R&D in the agriculture sector, but however,
active participation of the private sector was needed. So, the second-generation
reforms paved the way for active participation of the private sector in this field. Other
major reforms included the promotion of corporate and contract farming and irrigation.
• (Corporate farming is a term used to describe companies that own or influence farms
and agricultural practices on a large scale. And contract farming in wheat is being
practised in Madhya Pradesh by Hindustan Lever Ltd (HLL), Rallis and ICICI. Under the
system, Rallis supplies agri-inputs and know-how, and ICICI finances (farm credit) the
farmers)
The concept got recognition when a FMCG company called PepsiCo came to India
and set up a tomato processing plant in Hoshiarpur, Punjab. They procured the
tomatoes from farmers directly by setting up contracts with them. This led to an
increase in tomato yield from 7.5 tons per acre to 20 tons per acre.
3. Tax Devolution to the States
Tax devolution is one of the core tasks of the 15th Finance Commission constituted
under Article 280 (3) of the Constitution. The commission makes recommendations
regarding the distribution of net proceeds of taxes between the Union and the
States.
• The Centre now made policies that were inclined towards the interest of the
States. The Planning Commission and Financial Commission now took greater
fiscal care of the state. Central Government made the policy to provide greater
fiscal leverage to the states, and also initiated the tax reforms, which were,
again, in favor of the states.
4. Reforms in the Social Sector
Along with the infrastructure and agriculture, the Government also took measures for
reforming the social sector in India, mainly healthcare and education. For this, the
Government enhanced the budgetary allocation for this sector and introduced many newer
development programs.
5. Fiscal Consolidation
Fiscal Consolidation was a major component of the first-generation reforms. But in the
second-generation reforms, the government provided a constitutional commitment for fiscal
consolidation by passing the Fiscal Responsibility and Budget Management Act (FRBM Act)
in 2003. And this step of the Central Government was followed by the States, as the states
also passed the Fiscal Responsibility Acts (FRAs).
6. Reforms in the Public Sector
Under the process of strategic disinvestment, government sells the majority stake in the PSE
(Public Sector Enterprise) and transfers the ownership and management control of the
concerned enterprise. This was mainly done to bring structural changes in the functioning of
the enterprises, as the ownership and management control was transferred to the private
entity, they had the power to make all the major decisions regarding the company.
 AGRICULTURE
Important role of agriculture in Indian economy.
1. Contribution to National Income:( )
• In 1950-51, agriculture and allied activities contributed about 59 per cent of the total
national income
• For example, the share of agriculture has declined to 54 per cent in 1960-61, 48 per cent
in 1970-71, 40 per cent in 1980-81 and then to 18.0 per cent in 2008-09, whereas in U.K.
and U.S.A. agriculture contributes only 3 per cent to the national income of these
countries.
2. Source of Livelihood:
• In India over two-thirds of our working population are engaged directly on agriculture and
also similarly depend for their livelihood. According to an estimate, about 66 per cent of
our working population is engaged in agriculture at present in comparison to that of 2 to 3
per cent in U.K. and U.S.A., 6 per cent in France and 7 per cent in Australia.
3. Source of Food Supply:
• Agriculture is the only major source of food supply as it is providing regular supply of food
to such a huge size of population of our country. It has been estimated that about 60 per
cent of household consumption is met by agricultural products.
4. Role of Agriculture for Industrial Development:
• Agriculture in India has been the major source of supply of raw materials to
various important industries of our country. Cotton and jute textiles, sugar,
vanaspati, edible oil plantation industries (viz. tea, coffee, rubber) and agro-based
cottage industries are also regularly collecting their raw materials directly from
agriculture.
• About 50 per cent of income generated in the manufacturing sector comes from
all these agro-based industries in India.
5. Commercial Importance
• Indian Agriculture is playing a very important role both in the internal and
external trade of the country. Agricultural products like tea, coffee, sugar, tobacco,
spices, cashew-nuts etc. are the main items of our exports and constitute about
50 per cent of our total exports. Besides manufactured jute, cotton textiles and
sugar also contribute another 20 per cent of the total exports of the country. Thus
nearly 70 per cent of India’s exports are originated from agricultural sector.
6. Source of Government Revenue
Agriculture is one of the major sources of revenue to both the Central
and State Governments of the country. The Government is getting a
substantial income from rising land revenue. Some other sectors like
railway, roadways are also deriving a good part of their income from
the movement of agricultural goods.
7. Role of Agriculture in Economic Planning
A good crop also brings a good amount of finance to the Government
for meeting its planned expenditure. Similarly, a bad crop lead to a
total depression in business of the country, which ultimately lead to a
failure of economic planning. Thus the agricultural sector is playing a
very important role in a country like India and the prosperity of the
Indian economy still largely depends on agricultural sector.
 AGENDA FOR ACTION/SUGGESTIONS TO
RESOLVE PROBLEMS
1)GREATER USAGE OF MODERN
TECHNOLOGY/TECHNOLOGICAL MEASURES.
2)BETTER CREDIT FACILITIES/INSTITUTIONAL CREDIT.
3)LAND REORMS
4)DEVELPOMENT OF RESEARCH INSTITUTES
5)BETTERMENT OF WAREHOUSING AND DISTRIBUTION
SYSTEM
6)INPUT SUBSIDIES TO AGRICULTURE
7) TARGETD PUBLIC DISTRIBUTION SYSTEM(TPDS)
8)RURAL EMPLOYMENT PROGRAMMES.
1)Greater Usage Of Modern Technology
• Components include improved seeds, fetilizers and pesticides made easily to farmers at fair prices.
• Training to farmers about usage of technology and components especially on fertilizers & chemical
pesticides etc.
• Services like guidance and counseling to be provided.

2)Better Credit Facilities

• Timely and sufficient assistance is precondition to usage of better Technology. Govt launched various
schemes & institutions to improve the credit systems by establishing different banks like Grameen bank,Co-
operative banks, Nationalised banks and NABARD was set up.
• Expansion of credit facilities to farmers eliminate the exploitation of farmers from money lenders.
3)Developmet of Research Institutes
The research labs and Agricultural universities have been established , upgraded and susutained .The problems
such as lack of resources,equipments and experts should be addressed immediately . Research should be
applied in the farming also.

4)Betterment of Warehousing and Distribution sysytem

Warehousing facilities are so underdeveloped that the goods stored are unsuitable for consumption.Many
regions in the country are having shortage of food suplpy because it will be roten in the warehouse
5)Land Reforms
Measures to abolish intermediary interest in land transfer of land to actual tiller of the soil were expected to be
taken up on a priority basis.
The measures include.
• Abolition rents paid by tenants to landlords
• Security of tenure to tenants
The Landlord and Tenant Act 1954, security of tenure refers to tenants having the right to keep living in a
property even after reaching the end of the fixed term on their tenancy agreement.

6)Input Subsidies to agriculture

The Objectives of input subsidation is to increase agricultural production and productivity by encouraging the
use of modern inputs in agriculture.Here under the govt policy various inputs to the farmers are supplied at less
prices which are below the level than the market price.

7)TPDS(Targeted Price Distribution System)

In 1997 came into being and controlled by Ministry of Consumer affiars
Here the Govt issues Special cards to BPL and arrangements for identification of poor for delivery of food grains
at fair prices and distribution in a transparent and accountable manner .
10Kg of foods grains per month
20k to 35 kg per month effective 2002 april
According to Economic survey 2007-08, 73 % of the poor family benefited from TPDS.
8)Rural Employment programmes
Large scale poverty alleviation programmes in the
form of rural employment programmes are required.
So the govt introduced SFDA (Small Farmers
programmes are required.
MFAL(Marginal farmers and agricultural labour
development agency)
JRY(Jawahar Rozgar Yojana)
EAS(Employement assurance scheme )
NATIONAL COMMISSION ON FARMERS
• M.S SWAMINATHAN
He was the chairman of U N Science Advisory
committee set in 1980.
He was the father of green revolution (in India)
Swaminathan report is know as NCF.
He served as Director of the Indian Agricultural
Research Institute (1961-72),Director General of
Indian council of Agricultural Research.
 INRODUCTION
• The NCF was constituted on November 18, 2004 under the
chairmanship of Professor M.S.Swamynathan.
• The NCF submitted four reports in Dec 2004, August2005,Dec
2005 and April 2006 respectively. The fifth and Final report was
submitted on Oct 4,2006.
• The report contain suggestions to achieve the goal of “faster and
more inclusive growth”
KEY-POINTS
• Report has suggested for “faster and more inclusive growth”
• Recommendation given in this report –
1)Provide minimum support price for grain
2)Safeguard the interest of small farmers
KEY FINDINGS AND RECOMMENDATIOS

1.Land Reforms.
2.Irrigation.
3.Productivity of Agriculture.
4.Credit and Insurance.
5.Food Security.
6.Prevention of farmer suicide.
7.Competitiveness of farmers.
8.Employment
 LAND REFORMS

1. Land reforms are necessary to address the basic

issue of access to land for both crops and livestock.
• Land holdings inequality is reflected in land
ownership.
Recommendations
• Distribute ceiling-Surplus and waste lands.
• Prevent diversion of prime agricultural land and
forest to corporate sector for non agricultural
purposes.
 IRRIGATION

A comprehensive set of reforms to enable

farmers to have sustained and equitable access
to water.
• Increase water supply through rain water
harvesting.
• “Million wells recharge programme” should be
launched.
 PRODUCTIVITY OF AGRICULTURE
• Apart from size of holding, the productivity levels
primarily determine the income of the farmers.
• However, the per unit area productivity of Indian
Agriculture is much lower than other crop
producing countries.
• Recommendations
• A national network of advance soil testing
laboratories with facilities for detection of
micronutrient deficiencies.
 CREDIT AND INSURANCE
• Timely and adequate supply of credit is a basic
requirement of small farm families.
• NCF suggests:
• Expand the outreach of the formal credit system to reach
the really poor family.
• Reduce rate of interest of crop loans to 4 percent , with
govt support.
• Establish an Agriculture Risk Fund to provide relief to
farmers after successive natural calamities.
• Issue Kisan credit cards to Women farmers with collateral.
 FOOD SECURITY
• The Mid-term appraisal of the 10th plan revealed that India is lagging
behind in achieving the millennium Development goals of having hunger
by 2015.
• Therefore, the decline in per capita foodgrain availability and its unequal
distribution have serious implications for food security in both rural and
urban areas.
• Recommendations
1) Reorganize the delivery of nutrition support programmes on a life cycle
basis with the participation of panchayats and local bodies.
2) Promote the establishment of community Food and water banks
operated by Women self -help groups(SHG) based on the principle
‘Store Grain and Water everywhere.
3) Help small and marginal farmers to improve the productivity, quality
and profitability of the farm enterprises
 PREVENTION OF FARMERS’ SUICIDES
• In the last few years, a large number of farmers have committed suicide.
• Cases of Suicide have been reported from states such as Andra Pradesh,
Karnataka,Kerala,Punjab,Rajasthan,Orissa and Madhya Pradesh.
• The NCF has underlined the need to address the farmers suicide
problem on priority basis.
• Measures for Prevention of Farmers’s Suicide
• 1) Cover all crops by crop insurance with the village.
• 2) Provide social security net with provision for old age support and
health insurance.
• 3)Public awareness campaigns to make people identify early signs of
suicidal behavior
• 4) Need swift action on import duties to protect farmers from
international price.
 COMPETITIVENESS OF FARMERS
• It is imperative to raise the agricultural competitiveness of
farmers with small land holdings.
• Productivity improvement to increase the marketable surplus
must be linked to assured and remunerative marketing
opportunities.
• Measures
• Improvement in implementation of Minimum Support
price .Arrangements for MSP need to be put in place for crops
other than paddy and wheat. Also Millets and other nutritious
cereals should be permanently included in the PDS.
• MSP should be at least 50%more than the weighted average cost
of production.
 EMPLOYMENT
• Structural change in the workforce is taking place in India slowly. In 1961,
the percentage of workforce in agriculture was75.9%.while the number was
decreased to 59.9% in 1999-2000.
• But the agriculture still provides the bulk of employment in the rural areas.
• The overall employment strategy in India must seek to achieve two things.
• First, create productive employment opportunities and second to improve
the ‘quality’ of employment in several sectors the real wages rise through
productivity
• Measures
• Accelerating the rate of growth of the economy.
• Emphasizing on relatively more labour intensive sectors and inducing a
faster growth of these sectors.
• Improving the functioning of the labor markets through such modification
as may be necessary without eroding the core labour standards.
 Agricultural Policy

• Agricultural policy of a country is mostly designed by the

Government for
• Raising agricultural production and productivity
• Raising the level of income and standard of living of farmers
within a definite time frame.
• This policy is formulated for all round and comprehensive
development of the agricultural sector.
• Main Objectives of AP in India
• i) Raising the Productivity of Inputs:
• ii) Protecting the Interest of Poor Farmers:
• iii) Modernizing Agricultural Sector
• iv) Agricultural Research and Training:
 National Agricultural Policy Document,
2000
• On 28th July, 2000, the NDA Government made public a
National Agriculture Policy envisaging over 4 per cent annual
growth through efficient use of resources and technology and
increased private investment while emphasizing on price
protection to farmers.
• The policy formulation has been necessitated due to the
relatively poor growth of agriculture experienced during the
1990s. The Policy Document observed, “Capital inadequacy,
lack of infrastructural support and demand side constraints
such as controls on movement, storage and sale of agricultural
products etc. have continued to affect the economic activity of
agricultural sector.
• National Agricultural Policy (2000) has taken the following important
objectives:

• 1. Attaining a growth rate above 4.0 per cent per annum in the agricultural
sector;
• 2. Attaining a growth which is based on efficient use of resources and also
makes provision for conservation of our soil, water and bio-diversity;
• 3. Attainment of growth with equity, i.e., attaining a growth whose impact
would be widespread across regions and different classes of farmers.
• 4. Attaining a growth that is demand-driven and cater to the need of domestic
markets and ensuring maximization of benefit from exports of agricultural
products in the face of challenges from economic liberalization and
globalization;
• 5. Attaining a growth that is sustainable technologically, environmentally and
economically.