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close this book Agriculture and rural development in the 1990s and beyond: redesigning the chemistry between state and institutions of development (1992)
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Open this folder and view contents I. Historical underpinnings
Open this folder and view contents II. Planning and command economy: 1950-90
Open this folder and view contents III. State as a player
Open this folder and view contents IV. Institutions as engine of development
Open this folder and view contents V. Awkward versus Subtle state
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Abstract

Capital formation, public sector investment planning and resource allocation are important aspects of Indian agricultural planning and policy formulation. However, this paper argues that in the India on the threshold of the 21st century, orthodox economic planning is unlikely to prepare the nation to meet the challenge of rapid agricultural and rural employment growth that it has failed to tackle so far. More is wrong with India than just the planning of her resource generation and allocation. Reviewing the last 40 years of agricultural and rural development experience, this paper argues that what India needs to do most is to focus, above all, on devising radical and innovative strategies that can yield and sustain 5%-7% annual growth rate in the value of output of the agricultural sector; and recent experience suggests that in nations which have secured anywhere near such high growth rates, the state and its institutions of economic development have done more than just orthodox economic planning.

In India too, we believe, this seemingly unachievable goal can be achieved, but only by redesigning the chemistry between the state and our institutions of economic development — our legal framework, markets, and economic organisations in the private, public, co-operative and informal sectors. In a new national ambience, the state must establish, as the super-ordinate goal of its policy, continual and sustained enhancement of the wealth producing capacity of our rural economy; equity, employment, food security and environmental balance must, at least for the next 15 years or so, be viewed as subsidiary goals which can be best achieved, in the medium run, by decisively channellising the productive energy of all of the nation’s institutions of economic development to the achievement of the super-ordinate goal. We also argue that, contrary to the popular belief, what India needs is not less state in the economic sphere but better state; that what we need is to roll back the present ‘awkward’ state; and instead, roll forth a ‘subtle’, nurturant state which can skillfully craft the engines of economic development that India is in dire need of.

In part I, we review Indian agricultural and rural development policy; and in part II, how it actually operates. Part III assesses the performance of the Indian state as a ‘player’ in the development process; in contrast, in part IV, we highlight the contribution of the institutions of development as ‘players’. Part V explores what is involved in rolling back the present ‘awkward’ state and rolling forth the ‘subtle’ state.