Macroeconomic considerations in the choice of an agricultural policy: a study into sectoral independence with reference to India

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Avebury, 1993 - Business & Economics - 383 pages
This book investigates the ways in which the agricultural sector in India impinges on the rest of the economy and analyses implications for the design of economic policy. A critical review of the various theoretical approaches to the interaction between agriculture and industry is followed by a discussion of agriculture's role in Indian economic growth. A computable general equilibrium model is constructed incorporating the main relationships between agriculture and the rest of the economy in order to examine the short- and medium-term impact of various public investment programmes and (agricultural) price policies on sectoral output levels, the rate of inflation, income distribution, the government budget, and the country's balance of payments. The findings point to the overriding importance for Indian industrialisation, of an expansion of the domestic market through an increase in productivity and income in agricultural. The results suggest the inadequacy of the market mechanism alone in ensuring adequate agricultural growth, and underline the importance of public infrastructural investment in agriculture and maintenance of adequate price incentives for farmers.

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Alternative Theories of AgricultureIndustry
Pareto Efficiency and Price Distortions

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