IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 2, Issue 4 (Jan. 2014), PP 15-25 www.iosrjournals.org www.iosrjournals.org 15 | Page Performance of Agro-Based Industries in India: A Critical Analysis *C.Lakshmi kantha reddy, **Prof S.Rathna kumari, Research Scholar,S.V.University, Tirupathi- dept of Economics, S.V. University, Tirupathi-517502 A.P. I. Introduction Agriculture has been a way of life and continues to be the single most important livelihood of the masses. Agricultural policy focus in India across decades has been on self-sufficiency and self-reliance in food grains production. Considerable progress has been made on this front. Food grains production rose from 52 million tonnes in 1951-52 to 244.78 million tonnes in 2010-11. The share of agriculture in real GDP has fallen given its lower growth rate relative to industry and services. However, what is of concern is that growth in the agricultural sector has quite often fallen short of the Plan targets. During the period 1960-61 to 2010-11, food grains production grew at a compounded annual growth rate (CAGR) of around 2 per cent. In fact, the Ninth and Tenth Five Year Plans witnessed agricultural sectoral growth rate of 2.44 per cent and 2.30 per cent respectively compared to 4.72 per cent during Eighth Five Year Plan. During the current Five Year plan, agriculture growth is estimated at 3.28 per cent against a target of 4 per cent. The Approach Paper to the Twelfth Five Year Plan emphasizes the need to “redouble our efforts to ensure that 4.0 per cent average growth” is achieved during the Plan if not more. Without incremental productivity gains and technology diffusion across regions, achieving this higher growth may not be feasible and has implications for the macroeconomic stability given the rising demand of the 1.2 billion people for food. Achieving minimum agricultural growth is a pre-requisite for inclusive growth, reduction of poverty levels, development of the rural economy and enhancing of farm incomes. Agriculture including allied activities, accounted for 14.5 per cent of gross domestic product (GDP) at 2004-05 prices, in 2010-11 as compared to 14.7 per cent in 2009-10. Notwithstanding the declining trend in agriculture‟s share in the GDP, it is critical from the income distribution perspective as it accounted for about 58 per cent employment in the country according to Census 2001. Hence growth in agriculture and allied sectors remains a „necessary condition‟ for inclusive growth. In terms of composition, out of the total share of 14.5 per cent that agriculture and allied sectors had in GDP in 2010-11, agriculture alone accounted for 12.3 per cent, followed by forestry and logging at 1.4 percent and fishing at 0.7 per cent . Reasonable growth in agriculture is important both from the nutritional point of view as well as to control food prices and overall headline inflation. The place of the agro-based industries in the development of India is widely recognized and needs no emphasis. They can provide vast employment opportunities at comparatively low investment. The techniques of production adopted by the agro-based industries are simple and the machinery and equipment required by them is easily available. The share of all agro-based industries in India account for 35.3 per cent of the total industrial units in India 40.32 per cent share of total employment and 21.69 of the total value of industrial output, and 15.18 per cent of the net value added during the year 2010-11. The percentage of working capital, fixed capital and net income of agro-based industries to total industries is 21.26 per cent, 20.3 per cent and 13.96 per cent respectively. II. Performance Of Agro-Based Industries Category-wise Agro-Based Industries in India The total number of agro-based industries has increased from 28,584 in 2006-07 to 30,514 in 2011-12 with only 0.38 per cent growth rate. The manufacture of food products and beverages accounts for more than half of the total output of agro-based industries in India. Under this category, the manufacture of grain mill products, starches and starch products and prepared animal feeds is playing a prominent role with a share of 53 per cent. The number of textile manufacturing units has the highest percentage next to food products and beverages, put their number has decreased slightly from 2006-07 to 2011-12, due to the continuous decrease in spinning, weaving and finishing of textiles from 27.25 per cent in 2006-07 to 26.68 per cent in 2011-12. The manufacture of leather products also shows the same trend during the period under study. This is presented in the diagram 4.1.
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PROBLEMS AND PERFORMANCE OF AGRO … Of Agro-Based Industries Category-wise Agro-Based Industries in India The total number of agro-based industries has increased from 28,584 in 2006-07
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Performance Of Agro-Based Industries In India: A Critical Analysis
www.iosrjournals.org 25 | Page
Source: 1. Annual Survey of Industries, Central Statistical Organisation, New Delhi. (Different issues).
2. www.indiastat.com
CATEGORY WISE NET INCOME OF AGRO-BASED INDUSTRIES IN INDIA
(Rs. in Lakhs)
Source: 1. Annual Survey of Industries, Central Statistical Organisation, New Delhi. (Different issues).
2. www.indiastat.com
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