Performance of Agro-Based Industries in India: A Critical Analysis

Abstract

Agriculture has been a way of life for many people and is their primary source of income. Agricultural policy in India has always emphasised self-sufficiency and self-reliance in food grain production. On this front, significant progress has been made. The production of food grains increased from 244 million tonnes in 2010-12 to 544.78 million tonnes in 2021-22. Agriculture's percentage in real GDP has decreased due to its slower growth rate than industry and services. What is concerning, though, is that agricultural growth has frequently fallen short of Plan targets. Food grain output increased at a compound annual growth rate (CAGR) of roughly 2% from 2001-02 to 2021-22. Food grain production increased at a compound annual growth rate (CAGR) of roughly 2%. In fact, agriculture sectoral growth rates in the Nmnjhyu878-+th and Tenth Five Year Plans were 2.44 percent and 2.30 percent, respectively, compared to 4.72 percent in the Eighth Five Year Plan. Agriculture growth is expected to be 3.28 percent under the current Nithi ayoga long tarm Plans, compared to a target of 4%. The Approach Paper to the highlights the necessity to "redouble our efforts to ensure that 4.0 percent average growth, if not higher," is accomplished during the Plan. This faster growth may not be possible without incremental productivity increases and technology diffusion across areas, which has ramifications for the macroeconomic environment. Reaching minimal agricultural growth is a prerequisite for equitable growth, poverty reduction, rural economic development, and increased farm revenue. Agriculture, including allied sectors, contributed for 14.5 percent of GDP at 2021-22 prices in 2020-21, up from 14.7 percent in 2021-22. Despite the downward trend in agriculture's percentage of GDP, it is crucial from an income distribution standpoint, accounting for over 52% of employment in the country according to Census 2011. As a result, expansion in agriculture and related industries remains a "necessary condition" for equitable growth. Agriculture alone contributed for 12.3 percent of the entire contribution of 14.5 percent that agriculture and allied industries had in GDP in 2021-22, followed by forestry and logging at 1.4 percent and fisheries at 0.7 percent. Appropriate agricultural growth is critical for both nutrition and the regulation of food prices and overall headline inflation. The importance of agro-based industries in India's development is generally acknowledged and does not need to be emphasised. They can provide a large number of job opportunities for a relatively small investment. The production procedures used by agro-based companies are basic, and the technology and equipment required by them are readily available.