Industry Vs. Agriculture: Prime Moving Force Debate
Soon after the independence, the Indian government selected industry to be the prime moving force of the Indian development. However, there was a great debate over this choice, as agriculture was thought to be more suitable for the role of the prime moving force in India.
The selection of industry as the prime moving force was also questioned as:
There was almost an absence of infrastructure sector, like- power, transport, and communication, in India;
There was also a negligible presence of infrastructure industries, like Iron & Steel, Cement, Coal, Crude Oil, Oil Refinery and Electricity;
Lack of investible capital;
Absence of required technology to support industrialization. There was also no R&D in India;
Lack of skilled manpower;
absence of entrepreneurship among the Indian masses;
Absence of the market for the industrial goods.
Thus, it was argued that agriculture should be the prime moving force of the Indian economy, because:
India had abundant natural resources of fertile land;
Adequate human resources. Additionally, agriculture did not require much skilled labor or training of the masses;
An overwhelming majority of the Indian population was already engaged in agricultural activities.
However, agriculture needed a thorough reorganization, through reform in land ownership patterns, better irrigation facilities and other inputs to agriculture. It was argued that ones the food crisis was resolved, one of the major concerns of development would be addressed automatically.
The Indian model was deeply influenced by the then leadership. Jawaharlal Nehru guided the economic thinking of the time and laid his faith in the industrial sector. Thus, the early model of Indian economic development has been referred to as ‘Nehruvian Economics‘.
People Republic of China, in 1949, adopted a model of development with Agriculture as the Prime Moving Force. The surplus generated from agriculture, in China, was invested to develop the industrial sector. This model worked well for China, and soon China became one of the leading industrial nations of the world.
Reason Behind choosing Industry as the Prime Moving Force
Indian agriculture was based on traditional tools and technology. Modernization of agriculture was obstructed due to the absence of an indigenous industrial support. Import of industrial equipments would have cost huge foreign reserves. Thus, industry was chosen so as to build the base for industrialization as well as agriculture.
Industrialization was the buzzword at that time. The international organizations like IMF and WB favored nations with industrial orientation. Industrial model was seen as a key to faster growth. International organizations also supported the member countries to industrialize. Such support and motivation was not available in case of the agricultural model.
The Second World war proved the supremacy/need of the Defense Power. To be secure, it was necessary that defense equipments were made indigenously. However, this required an industrial base as well as a developed science and technology.
The consensus for the reform in the social system was build even before independence. The growing inclination of the leadership as well as the masses towards the modernization process made them accept the model of industrialization.
Changing Trends in India: Towards Agriculture
From the last decade of the 20th century (1990s), there came a change in the outlook towards the economic sector. Agriculture was no longer seen as a mark of backwardness. The Chinese experiment has proved to the world that even agriculture could generate development for a country.
In this background, India started to introspect its development model. Thus, a major shift took place in the Indian economic thinking, and the government announced, in 2002, that agriculture was the prime moving force of the economy.
The Planning Commission argued that this decision would solve 3 problems:
- Food security & Agricultural exports;
- Poverty Alleviation; and,
- Development of Indian market.
Presently, more than 65% of Indian population is dependent on the agriculture and allied sectors, while only 18.5% of the GDP comes from it. There is a need to increase the income in the sector, and to empower the masses.
Team Aspirant Forum