ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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What Drives Annual Agricultural Growth Rates in India?

In India, the agricultural growth rate is linked to rainfall, and medium-term growth to technology adoption, policy frameworks, and institutional interventions. But, growth in a year may be poor as much due to the good monsoon or abnormally wet conditions in the previous year as the poor monsoon during that year, or it may be high due as much to the poor monsoon in the previous year as to a good monsoon of the year or to policy reforms. As the rainfall fluctuates annually, medium-term growth rates should be assessed; the annual rainfall in the base year should be close to normal.

In India, the practice of predicting the annual agricultural growth rate dates back to independence in 1947. Predictions are made before the onset of the monsoon, once the forecasts of the India Meteorological Department (IMD) of the country’s rainfall are made available. The prediction of agricultural growth for the ensuing crop year considers mainly whether the rainfall would be normal, above normal, or below normal. It is still widely believed that agriculture in India is a “gamble with the monsoon”; the short-term (mainly annual) agricultural growth rate is linked with annual rainfall, and it is held that a good monsoon would ensure high agricultural growth rate during that year. By extension of this logic, a low annual growth rate in the agriculture sector is attributed to the failure of the monsoon during that year. More strangely, an impressive growth rate in agriculture in the medium term is attributed to high performance of the sector in terms of technology adoption, policy frameworks, and institutional interventions. The two questions that arise are discussed.

What Drives Agricultural Growth?

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Updated On : 7th Jan, 2019

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