One of the enduring problems
with the Indian economy, in-
spite of all its development and rapidly growing
emerging economy status, is the fact that the Indian population is heavily
dependent on agriculture. This is despite the fact that the share of
agriculture as a percentage of overall GDP has declined dramatically over the
years. Over half of India's GDP was attributable to agricultural activities at
the time of independence; and today, the contribution of agriculture to
GDP has reduced to less than one-fifth. Therefore, there has been
enormous progress in weaning the economy away from an overdependence
on agriculture. This is obviously a good thing, as much of Indian
agriculture is still dependent on rainfall due to inadequate infrastructure by way
of water storage facilities and other irrigation systems. Given the fickle
nature of the monsoon, which is the principal source of water for
agriculture in the country, the reduction of agricultural share in total GDP
provides an increasing degree of stability to India's economic growth.
This by itself looks very encouraging, until one digs deeper and
discovers that over half of the Indian population still depends on agriculture
for its basic livelihood. Agriculture, is therefore, the most important
sector from the point of view of employment for majority of the people of
this country. Although the share of agriculture as a percentage of GDP
has reduced over the years, a similar change in agricultural
employment as a percentage of overall employment has not occurred. As a
result, the per capita GDP of agricultural workers is very low when
compared to overall per capita GDP. This is simply because per capita
agricultural GDP is the result of less than a fifth of total
GDP being divided by more than half of total
population. This sorry state of affairs has
ensured that grinding poverty has continued to be the norm in rural areas, where
agriculture is the predominant occupation. When compared to the
success that the Indian economy is enjoying in other sectors such as
manufacturing and services, this disparity is
leading to increasing inequality in income between those who are occupied in
agriculture and those who are occupied in manufacturing and services.
Extreme poverty and income inequality is increasingly leading to
social unrest and in the clairvoyant words of Prime Minister
Manmohan Singh - Maoism is increasingly turning out to be the gravest internal
security threat that the Indian State has ever faced. This Maoist cancer
has the potential to nip the Indian success story in the bud, and reverse
any gains that we might make as a result of economic success in other
areas. The relative poverty of the agricultural population is the fuel that
feeds the fire of resentment among the rural populace. This resentment
provides the Maoists with easy recruitment opportunities to swell
their ranks. This added dimension therefore makes it all the more
imperative to take urgent and concerted steps that would mitigate poverty in
the rural areas and provide the people with a better standard of living. |