QUESTION 1
Profile of Indian Economy
Agriculture
Overview
Agriculture is a very dominant sector of the Indian economyand accounts for 22 percent (as on September 2005) of GDP. Agriculture derives its importancefrom the fact that it has vital supply and demand links with the manufacturing sector. During thepast five years agriculture sector has witnessed spectacular advances in the production andproductivity of food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultryand dairy. India has emerged as the second largest producer of fruits and vegetables in theworld in addition to being the largest overseas exporter of cashews and spices. Further, India isthe highest producer of milk in the world.Prospects of agricultural production in 2005-2006 are considered to be bright with near normalrainfall. The emerging areas in agriculture like horticulture, floriculture, organic farming, geneticand engineering, food processing, branding and packaging and future trading have highpotential of growth.Horticulture, floriculture, fishery, poultry and animal husbandry, which account for 30 percent of production agriculture and allied sectors, are expected to achieve a growth rate of 6 percent.Further, production of commercial crops like jute, tea, coffee, oilseeds and sugarcane are alsoexpected to increase. Consequently the overall value added in the primary sector is expected toincrease by 3 percent in 2005-2006.On the research front, the National Agriculture Research system has taken a number of newinitiatives to face the challenges of agriculture sector. The National Agricultural Innovationproject launched in association with the World Bank assistance with an envisaged investment of 1150 crores aims at increasing farmers income, employment, livelihood security. An Indo -USknowledge initiative in agriculture has been launched in agriculture to reorient the currentresearch system and bring about a second green revolution in India.Agriculture has been the centre stage for India's discussion in the WTO negotiations. In therecent WTO talks, India has shown a tough stand on agriculture and has demanded a levelplaying field.
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Agricultural Production and Growth in 2005-06
Prospects of agricultural production in 2005-06 are considered to be bright with near normalrainfall. The delayed monsoon and its somewhat uneven distribution over time and space hadsome limited adverse impact on the kharif crops (sown in June-July and grown mainly underunirrigated conditions). Coarse grains, pulses, oilseeds, cotton and plantation were affected themost, while the impact was less on the production of rice and sugarcane, where access toirrigation is the greatest. However, loss of Kharif crop is expected to be more than compensatedby the Rabi output. Total food grains production is estimated to increase marginally in 2005-06.Horticulture, floriculture fishery, poultry, and animal husbandry, which account for 30 percent of production in agriculture and allied sectors, are expected to achieve a growth rate of 6 percent.Production of commercial crops like jute, tea, coffee, oilseeds and sugarcane are also expectedto increase although by a lower rate. Consequently, overall value added in the primary sector isexpected to increase by 3 percent in 2005-06.Total foodgrains production declined from 213.5 MT in 2003-04 to 204.6 MT in 2004-05. Outputof jute and mesta and sugarcane was also lower in 2004-05 than in 2003-04. However, therewas better performance in oilseeds and cotton production in 2004-05 relative to 2003-04.The first advanced estimates of foodgrains production for 2005-06 released by Ministry of Agriculture on September 19, 2005 put kharif production at 105.3 MT, up by 2 MT from theprevious year's level. Production of rabi foodgrains would be around last year's level of 101.3 MTprovided the weather remains favourable.Kharif oilseeds production for 2005-06 is estimated at 14.6 MT as per the first advanceestimates. The rabi oilseeds production may reach the target level of 10.4 MT with favourableweather. The first advance estimates with for 2005-06 put sugarcane output at 257.7 MTagainst 232.3 MT in 2004-05.
Foodgrains Production(Million Tonnes)Crop/ year2000-012001-022002-032003-042004-05*2005-06**
Rice85.093.371.888.385.373.8Wheat69.772.865.872.172.0-CoarseCereals31.133.426.138.133.926.4Pulses11.113.411.114.913.45.0Foodgrains(I) Kharif (II) RabiTotal (I+II)102. 194.7196.8 112.1100.8212.9 87.287.6174.8 116.996.6213.5 103.3101.3204.6 105.3--*4
th
advance estimates**1
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advance estimates (Kharif only)Source: Ministry of Agriculture
Commercial Crops Production(Million Tonnes)Crop/year2000-012001-022002-032003-042004-05@2005-2006**
Groundnut6.47.04.18.27.05.9Rapeseed & Mustard4.25.13.96.28.4-Soybean 5.36.04.77.97.56.6Other Oilseeds 2.52.62.1 3.03.22.1Total nine oilseeds18.420.714.825.326.114.6Cotton*9.510.08.613.917.015.9Jute and Mesta**10.611.711.311.210.510.1Sugarcane 296.0297.2287.4237.3232.3257.7*Million bales of 170 kgs. Each@ 4
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Advance estimates**1
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Advance estimates (Kharif only)Source: Ministry of Agriculture
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