Economic reforms and agriculture in India: A state‐wise analysis of post‐reforms period

• Published date: 01 February 2022
• Author: Waseem Khan,Saghir Ahmad Ansari,Tabassum Ali
• Date: 01 February 2022
• DOI: http://doi.org/10.1002/pa.2390

ACADEMIC PAPER

Economic reforms and agriculture in India: A state-wise

analysis of post-reforms period

Waseem Khan

1

| Saghir Ahmad Ansari

2

| Tabassum Ali

3

1

Institute of Business Management, GLA

University, Mathura, India

2

Department of Agricultural Economic and

Business Management, Aligarh Muslim

University, Aligarh, India

3

Department of Business Administration,

Khwaja Moinuddin Chishti Urdu, Arabi-Farsi

University, Lucknow, India

Correspondence

Waseem Khan, Institute of Business

Management, GLA University,

Mathura 281 406, Uttar Pradesh, India.

Email: waseemdbf42@gmail.com

This study analyses the performance of agriculture sector including the dynamics of

gross and net cropped area, cropping intensity, yield of major crops, cropping pattern,

use of consumable and durable agricultural inputs, and institutional credit at state

and overall India level since the economic reforms by collecting data from published

sources. Post-reforms period has been divided into two phases: The first phase from

1990–1991 to 2000–2001 and the second phase from 2000–2001 to 2014–2015.

Findings of the study show acceleration in the growth of most of the states in the

second phase (TE 2003–2004 to TE 2014–2015), particularly in those states that

showed a decline in their growth rates in the first phase. Moreover, the use of

durable and consumable inputs has increased in the second phase with a moderate

level of diversification towards non-food crops in some states.

JEL CLASSIFICATION

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1|INTRODUCTION

Agricultural transformation in India can be categorized into three dis-

tinct stages. The first stage covers a period from independence to

green revolution period, second, from green revolution to economic

reforms period and the third stage covers the post-reforms period. It

has been more than 25 years since the economic reforms were intro-

duced in India, which brought about many macroeconomic policy

changes in the economy. These policy changes have led to significant

structural changes in the Indian economy and have also helped

manufacturing and services sectors to grow faster, but agriculture did

not get any direct benefit from the economic reforms. In fact, direct

reforms in the agriculture sector were mostly avoided due to political

reasons. Moreover, it was expected that agriculture will indirectly

benefit due to changes in the exchange and trade policies. Abolition

of industrial licensing system and reduction in industrial protection

and WTO commitment were expected to benefit agricultural trade

and improve the terms of trade in its favour (Sen, 1992; Kalirajan and

Sankar, 2001; Mahadevan, 2003; and Bhalla & Singh, 2009). But

against this notion, De Roy (2017) found that the agricultural sector

could not perform remarkably as compared to pre-reform period.

Post-liberalization, the growth rate of food grain production has

declined below the population growth, which has happened for the

first time since independence. Cases of farmers' suicide have been

recorded continuously due to high agricultural distress. The institu-

tional support structure has weakened in agriculture sector, lowering

import protection, which has led to a fall in the prices of many agricul-

tural commodities (Nagaraj, Sainath, Rukmani, & Gopinath, 2014;

Ramakumar, 2009). However, Mahadevan (2003) stated that there

have been no considerable effects of liberalization on the Indian econ-

omy, although he added that it was too early to raise this argument.

However, in the post-reforms period, India has remained the net

exporter of agriculture commodities (Ansari & Khan, 2015). By using

econometric model, Mythili (2008) found that economic liberalization

did not make any impact on the acreage response for some commer-

cial crops like sugarcane, groundnut and cotton, while the yield

response improved significantly for staple crops, such as wheat and

rice. The growth of agriculture sector has declined over the years,

coupled with increased disparity in income across the economic sec-

tors. Capital formation in agriculture, rural credit and research and

extension have not been given due attention in the post-reforms

period. Public expenditure in agriculture sector declined and resources

were relocated away from agriculture after the economic reform. Only

4.9% of the total outlay was allotted to agriculture sector in the ninth

Received: 19 November 2019 Revised: 18 July 2020 Accepted: 11 August 2020

DOI: 10.1002/pa.2390

J Public Affairs. 2022;22:e2390. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of11

https://doi.org/10.1002/pa.2390