26
Apart from mechanisation being attributable to a rise in ICOR in
agriculture, vast delays and inefficiencies in executing irrigation projects in
the public sector and poor extension support system for private investment in
ground water exploitation and in such other fixed investment projects, have
contributed to the deterioration in agriculture ICOR.
Overall, the series of policy initiatives put inplace to revive the agricultural
scene after 2004-05 have given ‘hope that at least some of the causes of recent
poor agricultural performance are being reversed” (Planning Commission
2008, p.5). If
Mid-Term Appraisal of the Eleventh Five Year Plan
(2007-2012)
is to be believed, there are some signs of improvement. Above all, the rate of
agricultural growth did look up during 2005-06 and thereafter; between 2005-
06 and 2011-12, the growth rate has averaged 3.72% per annum contrasted
with less than half (1.73%) achieved during the preceding five-year period (see
earlier Table 2.7). For this period, there are also evidences of improvements
in the levels of living in the agricultural sector. Apart from the arithmetics
of improvements in per capita incomes, real wage rates in rural areas seem
to have considerably improved in recent years. After the introduction of the
popular Mahatma Gandhi National Rural Employment Guarantee Scheme in
February 2006 (MGNREGS), wage increases in rural areas have been quite
substantial. In the recent period, the Reserve Bank of India has been repeatedly
emphasizing that “the increases in wages in rural areas continued to be much
sharper than compared to the comparable rate of inflation” (RBI July 30, 2012,
p.43).
Looking at the agricultural growth in a disaggregated way, before the
recent recovery (more on it later), all major foodgrain and non-foodgrain items
had suffered setback after the decade of the 1990s and it was so with respect
to all output components: area, output and yield (Table 2.10). Interestingly, as
alluded to above, area under both foodgrains and non-foodgrains experienced
absolute fall after the 1990s, at any rate up to 2004-05, reflecting how farmers,
particularly small and marginal farmers, are withdrawing from cultivation.
The emergence of agricultural crisis after this period is reflected in the relative
stagnation (-0.15% growth) in the index of foodgrains output or an absolute
decline of 2.56% per annum in the index of non-foodgrains output for the
period 1999-2000 to 2004-05. In the preceeding period of the 1990s (1990-
91 to 1999-2000), these output indices had shown increases but experienced
steep declines in rates of growth from the rates shown in the preceding decade.
The average growth in agriculture GSDP for all the states together
worked out to 2.09% per annum during 1999-2000 to 2004-05, which has
