After gaining independence from British rule in 1947, India started its journey of rebuilding its economy and adopted centralised planning. It implemented the five-year plans as its main tool for development.
The Indian Government established the Planning Commission in the year 1950 to oversee the planning, allocation of resources, implementation and appraisal of five-year plans. The first five-year plan came into implementation in 1952 and was largely focused on agriculture, the creation of irrigation facilities, the construction of dams and the laying of infrastructure. Since then, India has focused on this sector.
Agriculture is the primary source of livelihood for about 58% of India’s population. But, previously, the main focus was on developing the industry sector, which was chosen as the prime moving force of the economy.
There are three main sectors in the Indian economy, i.e., primary, secondary and tertiary or service sectors. These sectors cater to different classes of people in the economy depending upon the nature of their activities. Here, we will focus on the agriculture and industry sectors.
The primary sector is also known as the agriculture sector and is mainly dependent on the availability of natural resources. Activities such as fisheries and forestry also come under this sector. This sector provides input or raw material for the secondary sector.
The secondary sector, often termed the manufacturing sector, is mainly dependent on the natural ingredients procured from the primary sector to create the goods. They consume the produce of primary sectors and create the final product for the end-user consumption. In terms of value added to the products or services, this sector is considered the best sector. Activities such as manufacturing and transportation fall under this category and are the backbone of the Indian economy.
If we analyse the decision today and consider the available resource base at that time, it seems illogical to choose industry as their prime mover at that time. The economy lacked prerequisites required for the industry as there were:
The 1990s saw a major shift in the agriculture sector globally. The agricultural sector no longer represented backwardness for an economy if they emphasised the agriculture sector as their prime engine of growth and development. The Indian economy witnessed a major shift when the then-Government of India declared in 2002 that agriculture is the prime moving force of our economy, instead of industry.
This policy shift was aimed to address the below-mentioned challenges faced by the economy at that time:
The major policies implemented towards improving the agriculture sector are:
The obvious choice could have been agriculture as the prime moving force of the economy due to the reason that India has a natural resource of fertile land, which was fit for cultivation, and for that, human resources did not require any kind of specialised training. Considering the size of the population that depends on the agriculture sector and various policies implemented by the Government, visible results of the policy shift have been witnessed.