Understanding AgricultureIndustry InterLinkages For Agrarian Development: Empirical Evidence From India45691

UNDERSTANDING AGRICULTURE-INDUSTRY INTER-LINKAGES FOR AGRARIAN DEVELOPMENT: EMPIRICAL EVIDENCE FROM INDIA Sahil Mehra PhD Research Scholar, South Asian University INTRODUCTION In the period following Second World War, newly independent countries, taking from the experience of developed countries, embarked on the process of growth and development Dominant development theories of the time emphasized the importance of industrialisation as the path for development, which became synonymous with idea of structural transformation Accordingly, an economy passes through a number of stages, where agriculture gives way to the modern industrial sector When trade and economic activities flourish across the economy, service sector grows in order to facilitate the trade Later, as the surplus population is absorbed in the modern sectors, the growth trickles down to the agriculture sector Within the development literature the role of agrarian sector has long been debated Any economy that embarks on the growth trajectory depends upon its agrarian sector for maintaining a certain socio-economic level for its citizens The sector not only provides food security to the economy, but also serves as a pool of surplus labor, provides employment while industry is at its nascent stage, provides raw-materials to fledgling industry and is a source of demand for industrial sector‟s products However, the Indian experience has been an anomaly in this chronological order of structural transformation As can be observed from the following table, relative contribution of agriculture to GDP has fallen over the years, while that of other sectors has increased over time However, employment capacity of both industrial and service sector have not increased proportionately in order to accommodate the surplus labor that is still employed in the agrarian sector If we look at employment elasticity across sectors for the year 2000, it was 0.02 for agriculture, 0.38 for industry and 0.35 for service sector The employment elasticity of the burgeoning service sector had fallen from 0.62 in 198894 to 0.35 in 2000 (Papola, 2005) Moreover, much of the surplus population from agriculture sector finds employment in the informal sector that is characterised by family labor, below minimum level wages, dismal working conditions etc., and, 86% of the working population is engaged in the unorganised1 sector The share of national income emanating from unorganised sector was around 60% in 2003-04, which makes it a significant part of the Indian economy (Kannan, 2007) Table 1: Sectoral Distribution of GDP and Worker Participation Rate (WPR) 1983 1993 1999-00 WPR GDP WPR GDP WPR GDP Agriculture 68.45 38.02 64.75 30.97 59.84 24.99 Industry 14.34 18.83 15.55 21.06 17.43 21.56 Services 17.21 43.14 19.70 47.97 22.73 53.45 Source: Reddy (2006) The speed and direction of structural transformation becomes all the more important when it is learned that Indian agrarian sector has been immersed under a deep socio-economic crisis A simple look at some figures gives us a grim picture, for example, agricultural output growth in 1980s was 3.19% and it fell to 1.58% in 1990s Though by 2004-05 growth increased to 1.9%, it still remained lower than the rate of growth of population Last 25 years have also witnessed falling area under all crops, while the area under all crops in 1980s grew at 0.1%, the growth rate became negative to -0.25% in 1990s (Jha, 2006) Food grain production in 2012-13 was 257.1 million tonnes, which fell to 253.2 million tonnes in 2015-16, a fall of almost 1.2 percent Per capita availability of arable land has experienced fast decline in the recent past, falling from more than hectares per person in 1980s to less than 15 hectares per person in 1990s The productivity rates for all major crops; wheat, paddy, pulses etc., have been falling The farming activity has become economically infeasible and according to National Crime Records Bureau of India in last two decades over three lakh farmers have resorted to committing suicide The literature provides a number of arguments ranging from ecological, technological to socio-political aspects (Reddy and Galab, 2006) for explaining agrarian distress However, this paper presents the view that the incomplete structural change has hampered the proliferation of incentives and opportunities for the sectors to grow With the introduction of market-based reforms after 1991, significant structural changes affected The unorganised sector is wider in scope than the informal sector to include unregistered, unregulated and informal enterprises Where, unregistered enterprises are those that employ less than 10 workers with power and less than 20 workers without power Legislation relating to various labor laws does not apply to unregistered enterprises (Narayana in Linking the Formal and Informal Economy, 2006) the agriculture sector (Vamsi, 2005; Jha, 2006; Chand et al, 2007; Patnaik, 2003; Chandrasekhar, 2007; Ghosh, 2005) However, its impact on domestic sectoral linkages is yet to be explored In an economy a balanced sectoral linkage is important for the creation and absorption of surplus resources, to avoid over-production or under-consumption over sustained periods The interdependence of sectors makes the economy more dynamic by increasing the interaction between different sectors, thereby generating spillover effects and positive externalities The advent of structural transformation at its core also means changing inter-sectoral linkages over time In this regard, it is argued that the linkages of agriculture sector become weak over time This could be due to a number of reasons like, diversification beyond agro-based industries, the sectors becoming self-reliant in terms of financing growth, the opening up of the economy affecting domestic sectoral interdependence, falling role of state policies, etc (Thirlwall, 1986; Vogel, 1994; Chakrabarti, 2015) If the linkages between the traditional agriculture sector, and the modern industrial sector become weak, it has drastic implications for the agriculture sector, for one, it will weaken the push and pull incentives for the agriculture sector Secondly, it could have implications for the modernisation of the sector in terms of adoption of productivity enhancing technology Thirdly, this will further hamper the already fractured process of structural transformation, resulting in the development process to continue independent of the agriculture sector As such, the trickle down effect will not come to fruition Given that 47% of the population is directly or indirectly dependent upon agriculture, it has direct implication on the standard of living and welfare of the people engaged in agriculture sector In this context, the objective of this paper is to understand the linkages of agriculture with the industry sector It is set against the background of sustained crisis festering in the Indian agriculture sector The literature on India in the field of studying sectoral linkages is quite limited; studies are based on aggregate analysis limited to certain time periods This paper aims to intervene in this regard, first, by taking a comparative study of the two phases, before and after the reforms of 1990 Secondly, the paper delves into a disaggregated analysis of sectoral linkages as an aggregate picture may hide much more than it reveals in terms of sub-sectoral linkages Thirdly, the paper also looks at how the intra-linkages have changed over time along with inter-linkages It will provide an insight on the extent to which the agriculture sector is dependent upon itself for survival in the face of the crisis The paper is structured as follows: Section reviews the literature on inter-sectoral linkages and their application in India Section explains the methodology Section describes the findings of the analysis followed by discussion of the results and conclusion in section LITERATURE REVIEW Inter-sectoral linkages are implicit in the structural transformation debate However, different strands of literature have focused on different aspects of the linkages between the traditional i.e agricultural sector and the modern i.e the industrial sector The „industrialisers‟ school of thought identified both supply and demand side linkages between agriculture and industry sector Initial thinking highlighted the supply side linkages where, agriculture sector had a passive role in the process of development, as a reservoir and supplier of surplus labor and savings2(Lewis, 1954; Ranis and Fei; 1961; Marx, in Mitra, 2005) Demand side linkages, where agriculture‟s importance as a source of demand for industrial products, increasingly became important with the models of Nurkse (1962), Thirlwall (1986), Adelman (1984), Vogel (1994) As the industrial sector across various developing countries stalled, „agrarianists‟, like Shultz (1964), Lipton (1968) argued that the developing countries should have prioritized agriculture sector as majority of the population is rural, labor productivity was low and rural poverty was high (Kay, 2009) Proponents argued that developing countries had comparative advantage in agricultural products and should specialise in these commodities and import of necessary industrial products (Saith 1990; Kay, 2009) Putting things in the context of India, after India became Independent it started on the process of planned development via Import-substituting Industrialisation The process was inherently based on un-balanced growth model (Chakravarty, 1987) The strategy focused little on agriculture sector and was viewed as being independent of the conditions of agriculture (Saith, 1990) The idea was based on trickle down theory, that growth in industry would pull other sectors along with it The logic was similar to that of Lewis‟s structural transformation theory State took it upon itself to develop the core base of the economy High rates of growth were achieved during the first 15 years The growth was Agriculture savings is acquired from taxation of exports, low agricultural prices, high prices on manufactured goods and overhauling the exchange rate (Timmer 2002) complemented with green revolution in mid-1960 However, by late 1960s India‟s industrial growth started to plummet A debate spurred up in the economic society regarding the reasons for the stall in growth Where one line of argument stated that it was because of „license raj‟ (Chakarvarty, 1987), while, the other argument found the reason to be disproportionality between the growth rates of the two dominant sectors i.e agriculture and industry (Patnaik, 1972) Raj (1976) and Mundle (1977) emphasized the small demand base from agricultural sector for the industrial products as one of the reasons for the stall in industrial growth In this context, it was argued by agrarianist school of thought that terms of trade were not in favor of agriculture sector throughout the initial phase of growth, which brought economic stagnation It was argued to open up the economy so that domestic prices become aligned with higher world prices, which would incentivize farmers to invest and bring about growth (Tyagi, 1987; Kahlon and Tyagi, 1980; Misra, 1998) A counter view was presented that marketed surplus of agricultural output does not depend on the terms of trade i.e the price incentive is not enough to raise the agricultural output (Thamarajakshi, 1969, 1999; Mitra 2005, Vittal, 1986) Further, it was argued that the failed land reforms, persistence of tenancy, in-egalitarian class relations with zamindars still dominating, contributed to the problem of slow agriculture growth, which in turn contributed to industrial stagnation (Bhattacharya et al, 2013; Mitra, 2005, Saith, 1990, Kay, 2009) A number of studies have been done using the input-output tables to study the dynamics of inter-linkages in the economy A study by Ghosh and Roy (1998) uses Qualitative input-output (1-O) analysis They have used the data for 1983-84 and 1989-90 in order to study the change in the linkages in the economy They found that agriculture sector largely remains a user of commodities in the economy in both the years Suryaprakash et al (2001) calculated the relative linkages using I-O tables for the years 1968-69, 1972-73, 1978-89 and 1983-84 It was found that from input use side, the food crops and commercial crops have integrated with the economy, but from output distribution side, the structure has not changed much Sastry et al (2003) use I-O tables for the years 1968-69, 1979-80, 1989-1990 and 1993-94 to study production and demand linkages They find that agriculture still plays a significant role in determining the overall growth of the economy through its linkages with other sectors They find that in 1960‟s production linkages were strong while, by 1990‟s demand linkages became quite strong Kaur et al (2009) use both analysis based on I-O tables and co-integration among the sectors They too find that agriculture exhibits strong demand linkages with the industry sector while; industry sector‟s demand dependence on agriculture has weakened since 1990‟s Munjal (2007) has used Multiplier Product Matrix to study the interdependencies of the sectors and the structural change that was brought upon by the reforms of 1990s The author uses three tables 1983-84, 1989-90 and 1993-94 The author does not focus on the linkages of agriculture sector, but according to their calculations both backward and forward linkages of agriculture sector have declined Mehta (2015) has used I-O tables from 1979-80 to 2007-08 The author shows that the dependence of agriculture on industry has increased over time, while that of industry on agriculture has reduced over time The author attributes the change to changing role of agro-food processing industry The author further concludes that incomes in agriculture are falling and one of the major reasons is rise in wages He suggests increasing interdependency of agriculture on industry in terms of modernisation so that labor can be substituted with capital-intensive techniques However, the author does not comment on the surplus labor that will be released due to capital-intensive techniques The absence of comparative analysis of change in sectoral-linkages over two time periods and an aggregate analysis cannot be taken at face value, as it may not be a complete picture A detailed disaggregated study of linkages is required in order to understand the role of agriculture sector in the economy METHODOLOGY The methods to analyse intersectoral linkages using input-output transactions tables can be categorized as either using input (or output) coefficients or by using the Leontief inverse coefficients Input-output tables were obtained for eight periods 1973-74, 1979-80, 1983-84, 1989-90, 1993-94, 1998-99, 2003-04 and 2007-08 The tables are prepared by CSO, which provide detailed information for input usage across 130 sectors However, for the benefit of our study the sectors were aggregated into 48 heads Since our study focuses on agricultureindustry linkage and trends overtime, we laid more focus on these two sectors and aggregated service sector into only three separate categories Next, these tables across time provide information in current prices In order to make these tables comparable across time, we converted the values into constant prices with base year 2003-04 To deflate the values of agriculture and industry sector WPI series were used WPI provides data on individual commodities and these were clubbed together according to our grouping of sectors in IOTT tables Appropriate weights were used to create new WPI series Rasmussen (1956) proposed to use the column (or row) sums of the Leontief inverse, (I A)-1, to measure intersectoral linkages The backward linkage, based on the Leontief inverse matrix, is simply defined as the column sums of the inverse matrix, i.e., n BLRj=  lij i 1 Where lij is the ij‟th element of Leontief inverse matrix that is denoted by L, i.e., L = (I - A)-1 Sector j‟s backward linkage, BLRj , reflects the effects of an increase in final demand of sector j on overall output; in other words, it measures the extent to which a unit change in the demand for the product of sector j causes production increases in all sectors Similarly, the corresponding forward linkage can be defined by reference to the rows of the Leontief inverse matrix Thus a measure of forward linkage of sector i is as: n R FL i= ålij j =1 It measures the magnitude of output increase in sector i, if the final demand in each sector were to increase by one unit; in other words, it measures the extent to which sector i is affected by an expansion of one unit in all sectors The Rasmussen method as compared to chenery-watanabe method takes into account both the direct and indirect effects of sectoral linkages However, Jones (1976) highlights that though Rasmussen method calculates backward linkages but does not give us an appropriate measure of forward linkage since it uses the Leontief matrix to calculate the forward linkages Ghosh (1958) suggests using row sum of inverse output matrix G= (I B)-1 to calculate the forward linkage of sector i, i.e n FLi = åg ij j =1 Next, we apply the concept of Relative Linkage, which is also measured in the inputoutput framework The relative linkage can be worked out both on the input-use side and output distribution side If there is a sector, say I, comprising nI subsectors from the system, then Relative Linkage for the sub-sector say I, within sector I is defined as the ratio of its intra-sector linkage to economy-wide linkage (Suryaprakash et al, 2001) Input RLi = ∑ / ∑ Where input RL of a sub-sector is the ratio of the amount of input drawn from its parent sector (intra-sector) linkage to the input drawn from the entire system (economy-wide) linkage to produce a unit of its output Output RLi = ∑ / ∑ The output RL of a sub-sector is the ratio of the proportion of its total output distributed to its parent sector to the proportion of its output distributed to the entire system as input The relative linkage ranges between and A value of on input use side means that the sub-sector is completely dependent on the system with no intra-sector dependence A value of indicates that the sub-sector is completely dependent on its parent sector Similarly, a value of on output distribution side implies that the sub-sector is independent of the system That is intermediate demand for its output is mostly from the parent sector FINDINGS Before we enter into complete analysis of backward and forward linkages of the sectors, it is important to have an overview of certain trends within the agriculture sector Table provides the proportion of output of different sub-sectors to the total agricultural output in that year The output of food crops as a percentage of total agricultural output has fallen over the years The output of cash crops has remained stagnant with a fall in 1998-99 Other crops, which includes certain high valued crops like fruits and vegetables has grown in size from 17% to 24% Forestry & Logging has also witnessed a significant increase in its output Output of Fishing sector along with Animal Husbandry as a percentage of total agriculture output have remained stagnant over the years Though the total agricultural output has increased over the years, agriculture sectors share in total output of the economy has fallen from 30% in 1973-74 to 12% in 2007-08 It seems that two sectors namely forestry & logging and other crops have maintained the growth in agricultural output Table 2: Sub-sector wise output as a proportion of Total Agriculture Output Food Crops Cash Crops Plantation Crops Other crops Animal Husbandry Forestry& Logging Fishing Total Agricutura l Output 1973-74 1979-80 1983-84 1989-90 1993-94 1998-99 2003-04 2007-08 45.840 46.102 41.876 40.449 37.532 31.391 35.377 34.081 15.263 12.033 12.710 14.060 12.633 10.308 12.313 13.309 0.690 0.660 1.240 1.349 1.578 2.297 2.228 1.902 17.697 17.459 17.631 15.748 19.181 29.122 21.408 24.029 20.511 23.747 26.545 28.394 29.076 26.883 28.673 26.678 2.518 3.058 6.261 5.641 5.103 4.807 4.789 11.361 3.742 4.173 3.740 6.120 6.206 4.399 4.797 3.735 2574839 2878736 3457906 4466166 5246053 6668338 7427285 1065979 8.37 7.09 9.54 3.24 1.09 8.67 0.77 38.7 A part of the output of the sector is used as intermediate products in the process of production and rest is utilized for final consumption in the economy So, we look at the trends in intermediate use of the agricultural output This reflects that how the output of various sub-sectors of agriculture sector is utilized by or distributed across different sectors of the economy It is an aggregate measure, where total output used as inputs by all the sectors in intermediate process of production is proportioned against that sub- sectors total output Similarly, proportion of the agricultural sub-sector‟s output that goes to satisfy the final use is also calculated Table 3: Intermediate Use Food Crops Cash Crops Plantation Crops Other crops Animal Husbandry Forestry& Logging Fishing 1973-74 1979-80 1983-84 1989-90 1993-94 1998-99 2003-04 2007-08 0.1443 0.1849 0.1798 0.2108 0.2224 0.2371 0.4287 0.4076 0.6934 0.7512 0.7836 0.7290 0.6771 0.6769 0.8064 0.8613 0.3514 0.4870 0.5047 0.5320 0.4151 0.5157 0.6204 0.7212 0.4213 0.4141 0.4904 0.4896 0.3649 0.4220 0.4731 0.4634 0.4275 0.3494 0.3136 0.2836 0.2497 0.2381 0.2858 0.3603 0.8073 0.5778 0.4544 0.3578 0.3728 0.3942 0.3314 0.5536 0.3840 0.2058 0.1409 0.1041 0.1104 0.1058 0.1491 0.2069 1973-74 1979-80 1983-84 1989-90 1993-94 1998-99 2003-04 2007-08 0.8557 0.8151 0.8202 0.7892 0.7776 0.7629 0.5713 0.5924 0.3066 0.2488 0.2164 0.2710 0.3229 0.3231 0.1936 0.1387 0.6486 0.5130 0.4953 0.4680 0.5849 0.4843 0.3796 0.2788 0.5787 0.5859 0.5096 0.5104 0.6351 0.5780 0.5269 0.5366 0.5725 0.6506 0.6864 0.7164 0.7503 0.7619 0.7142 0.6397 0.1927 0.4222 0.5456 0.6422 0.6058 0.6686 0.4464 Table 4: Final Use Food Crops Cash Crops Plantation Crops Other crops Animal Husbandr y Forestry 0.6272 Fei, J C and G Ranis (1961): “A Theory of Economic Development”, American Economic Review, Vol 514, pp 533-65 Jha, Praveen (2006) Some Aspects of the Well-Being of India's Agricultural Labor in the Context of Contemporary Agrarian Crisis The Indian Journal of Labour Economics , 49 (4), 741-764 Lewis, A W (1954): “Economic Development with Unlimited Supply of Labour”, The Manchester School of Economic and Social Studies, Vol 22, No 2, pp 139-91 Mitra, Ashok (2005) Terms of Trade and Class Relations, Rupa Mundle, Sudipto (1977), Home Market, Capitalism in Agriculture, and Drain of Agricultural Surplus Economic and Political Weekly, 12 (26), A49-A54 Narayana, M R (2006) Formal and Informal Enterprises: Concept, Definition, and Measurement Issues in India In: Basudeb Guha-Khasnobis, Ravi Kanbur, and Elinor Ostrom (eds.) 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Economic and Political Weekly: A173-A184 Vittal, Nalini (1986), "Intersectoral Terms of Trade in India: A Study of Concept and Method.", Economic and Political Weekly, 21(52): A147-A166 Vogel, Stephen J (1994), "Structural Changes in Agriculture: Production Linkages and Agricultural Demand-Led Industrialisation.", Oxford Economic Papers, 46(1): 136-156 Appendix 1: Food Crops Table 9: Relative Linkage -Input Use Side Input Use Side Intra-Sectoral Economy- Relative Linkage Wide Linkage Linkage 1973-74 0.1585 0.2319 0.6833 1979-80 0.1830 0.3186 0.5745 1983-84 0.1726 0.2904 0.5945 1989-90 0.1808 0.3789 0.4770 1993-94 0.1795 0.3855 0.4657 1998-99 0.1240 0.3298 0.3761 2003-04 0.3453 0.5883 0.5870 2007-08 0.3262 0.5357 0.6089 Table 10: Relative Linkage - Output Distribution Side Output Intra-Sectoral Economy- Relative Distribution Linkage Wide Linkage Linkage 1973-74 0.1270 0.1443 0.8800 1979-80 0.1464 0.1849 0.7919 1983-84 0.1323 0.1798 0.7361 1989-90 0.1547 0.2108 0.7336 1993-94 0.1716 0.2224 0.7716 1998-99 0.1242 0.2371 0.5237 2003-04 0.3283 0.4287 0.7658 2007-08 0.3198 0.4076 0.7846 Side Cash Crops Table 11: Relative Linkage -Input Use Side Input Use Side 1973-74 Intra-Sectoral Economy- Relative Linkage Wide Linkage Linkage 0.0951 0.1732 0.5492 1979-80 0.0935 0.1987 0.4706 1983-84 0.0975 0.1971 0.4947 1989-90 0.0919 0.2114 0.4349 1993-94 0.0920 0.2039 0.4510 1998-99 0.0655 0.2096 0.3126 2003-04 0.1896 0.3411 0.5558 2007-08 0.1529 0.3056 0.5006 Table 12: Relative Linkage - Output Distribution Side Output Intra-Sectoral Economy- Relative Distribution Linkage Wide Linkage Linkage 1973-74 0.0677 0.6934 0.0977 1979-80 0.0571 0.7512 0.0761 1983-84 0.0640 0.7836 0.0817 1989-90 0.0686 0.7290 0.0941 1993-94 0.0663 0.6771 0.0980 1998-99 0.0383 0.6769 0.0566 2003-04 0.1206 0.8064 0.1496 2007-08 0.0736 0.8613 0.0855 Side Plantation Crops Table 13: Relative Linkage -Input Use Side Input Use Side Intra-Sectoral Economy- Relative Linkage Wide Linkage Linkage 1973-74 0.1307 0.3862 0.3384 1979-80 0.4303 0.5931 0.7254 1983-84 0.1462 0.6735 0.2170 1989-90 0.1683 0.3220 0.5227 1993-94 0.0998 0.2304 0.4332 1998-99 0.0424 0.1836 0.2310 2003-04 0.0564 0.2414 0.2338 2007-08 0.1214 0.2992 0.4057 Table 14: Relative Linkage - Output Distribution Side Output Intra-Sectoral Economy- Relative Distribution Linkage Wide Linkage Linkage 1973-74 0.0032 0.3514 0.0092 1979-80 0.0117 0.4870 0.0240 1983-84 0.0072 0.5046 0.0142 1989-90 0.0033 0.5320 0.0063 1993-94 0.0067 0.4151 0.0160 1998-99 0.0051 0.5157 0.0098 2003-04 0.0098 0.6204 0.0158 2007-08 0.0037 0.7212 0.0051 Side Other Crops Table 15: Relative Linkage -Input Use Side Input Use Side Intra-Sectoral Economy- Relative Linkage Wide Linkage Linkage 1973-74 0.1264 0.2012 0.6282 1979-80 0.1179 0.2403 0.4909 1983-84 0.1386 0.2585 0.5361 1989-90 0.1754 0.4264 0.4114 1993-94 0.1409 0.3268 0.4312 1998-99 0.0675 0.1846 0.3658 2003-04 0.1535 0.2855 0.5377 2007-08 0.0945 0.2055 0.4597 Table 16: Relative Linkage - Output Distribution Side Output Intra-Sectoral Economy- Relative Distribution Linkage Wide Linkage Linkage Side 1973-74 0.2731 0.4213 0.6482 1979-80 0.2835 0.4141 0.6847 1983-84 0.3473 0.4904 0.7082 1989-90 0.3067 0.4896 0.6264 1993-94 0.2056 0.3649 0.5635 1998-99 0.1689 0.4220 0.4003 2003-04 0.2458 0.4731 0.5195 2007-08 0.2085 0.4634 0.4498 Animal Husbandry Table 17: Relative Linkage -Input Use Side Input Use Side Intra-Sectoral Economy- Relative Linkage Wide Linkage Linkage 1973-74 0.2947 0.4280 0.6885 1979-80 0.2393 0.3184 0.7516 1983-84 0.2535 0.3683 0.6884 1989-90 0.1812 0.2773 0.6534 1993-94 0.1450 0.2525 0.5742 1998-99 0.2003 0.2809 0.7133 2003-04 0.1512 0.3113 0.4858 2007-08 0.2015 0.3811 0.5286 Table 18: Relative Linkage - Output Distribution Side Output Intra-Sectoral Economy- Relative Distribution Linkage Wide Linkage Linkage 1973-74 0.2626 0.4275 0.6143 1979-80 0.2187 0.3494 0.6259 1983-84 0.2009 0.3135 0.6408 1989-90 0.1647 0.2836 0.5807 1993-94 0.1286 0.2497 0.5151 1998-99 0.1035 0.2381 0.4346 Side 2003-04 0.1360 0.2858 0.4760 2007-08 0.1541 0.3603 0.4278 Appendix 2: Food Crops Table 19: Intra-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 1.1003 1.1326 1.1094 1.1368 1.1529 1.0995 1.4014 1.3616 Cash Crops 0.0049 0.0032 0.0035 0.0033 0.0018 0.0018 0.0056 0.0051 Plantation 0.0001 0.0002 0.0002 0.0002 0.0002 0.0004 0.0007 0.0006 Other crops 0.0212 0.0198 0.0217 0.0152 0.0107 0.0107 0.0175 0.0257 Animal 0.0817 0.0794 0.0884 0.0740 0.0581 0.0396 0.0866 0.0845 Crops Husbandry Table 20: Intra-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 1.1003 1.1326 1.1094 1.1368 1.1529 1.0995 1.4014 1.3616 Cash Crops 0.0017 0.0010 0.0011 0.0010 0.0007 0.0005 0.0014 0.0031 Crops 0.0002 0.0004 0.0003 0.0003 0.0002 0.0001 0.0002 0.0005 Other crops 0.0131 0.0162 0.0197 0.0245 0.0301 0.0223 0.0504 0.0469 0.0413 0.0301 0.0338 0.0305 0.0275 0.0246 0.0291 0.0473 Plantation Animal Husbandry Table 21: Inter-linkage: Backward Linkages Iron,Steel 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 0.0063 0.0114 0.0091 0.0165 0.0153 0.0104 0.0171 0.0130 Industries&Foundaries Metal Products 0.0016 0.0020 0.0025 0.0038 0.0025 0.0025 0.0057 0.0049 Tractors&Agri 0.0017 0.0022 0.0058 0.0109 0.0033 0.0018 0.0059 0.0032 Industrial Machinery 0.0007 0.0004 0.0007 0.0016 0.0002 0.0004 0.0013 0.0009 Other Machinery 0.0015 0.0053 0.0021 0.0040 0.0040 0.0034 0.0088 0.0096 Electrical Machinery 0.0006 0.0009 0.0006 0.0027 0.0022 0.0019 0.0074 0.0060 transport 0.0011 0.0011 0.0031 0.0039 0.0026 0.0019 0.0055 0.0047 0.0001 0.0003 0.0006 0.0020 0.0045 0.0042 0.0064 0.0031 Implements Other equipment Miscellaneous Manufacturing Table 22: Inter-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 0.0005 0.0010 0.0012 0.0021 0.0014 0.0013 0.0020 0.0040 Metal Products 0.0003 0.0003 0.0004 0.0013 0.0006 0.0006 0.0008 0.0016 Tractors&Agri 0.0001 0.0001 0.0001 0.0002 0.0001 0.0001 0.0002 0.0003 Industrial Machinery 0.0001 0.0001 0.0001 0.0002 0.0001 0.0001 0.0002 0.0002 Other Machinery 0.0002 0.0005 0.0006 0.0026 0.0005 0.0005 0.0011 0.0024 Electrical Machinery 0.0004 0.0007 0.0006 0.0015 0.0008 0.0009 0.0029 0.0027 transport 0.0004 0.0005 0.0007 0.0019 0.0006 0.0008 0.0016 0.0027 0.0004 0.0006 0.0005 0.0007 0.0006 0.0009 0.0011 0.0024 iron,Steel Industries&Foundaries Implements Other equipment Miscellaneous Manufacturing Cash Crops Table 23: Intra-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.0051 0.0039 0.0036 0.0028 0.0020 0.0017 0.0040 0.0078 Cash Crops 1.0557 1.0530 1.0576 1.0619 1.0594 1.0312 1.1278 1.0736 Plantation Crops 0.0001 0.0001 0.0002 0.0001 0.0001 0.0003 0.0003 0.0006 Other crops 0.0130 0.0109 0.0119 0.0074 0.0065 0.0095 0.0146 0.0215 Animal 0.0513 0.0495 0.0495 0.0388 0.0402 0.0382 0.0892 0.0945 Husbandry Table 24: Intra-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.0148 0.0124 0.0114 0.0094 0.0054 0.0054 0.0160 0.0131 Cash Crops 1.0557 1.0530 1.0576 1.0619 1.0594 1.0312 1.1278 1.0736 Plantation Crops 0.0005 0.0004 0.0005 0.0003 0.0002 0.0002 0.0008 0.0004 Other crops 0.0106 0.0070 0.0089 0.0117 0.0084 0.0045 0.0084 0.0053 Animal 0.0624 0.0225 0.0328 0.0245 0.0190 0.0154 0.0144 0.0213 Husbandry Table 25: Inter-linkage: Backward Linkages iron,Steel 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 0.0041 0.0075 0.0062 0.0074 0.0071 0.0066 0.0068 0.0065 Industries&Foundaries Metal Products 0.0016 0.0015 0.0020 0.0021 0.0012 0.0017 0.0026 0.0026 Tractors&Agri 0.0010 0.0014 0.0027 0.0040 0.0017 0.0012 0.0011 0.0006 Implements Industrial Machinery 0.0001 0.0000 0.0000 0.0001 0.0001 0.0001 0.0001 0.0001 Other Machinery 0.0014 0.0040 0.0016 0.0022 0.0019 0.0022 0.0041 0.0059 Electrical Machinery 0.0004 0.0006 0.0004 0.0013 0.0010 0.0012 0.0033 0.0034 Other transport 0.0011 0.0007 0.0022 0.0020 0.0013 0.0013 0.0028 0.0029 equipment Miscellaneous Manufacturing 0.0001 0.0002 0.0005 0.0013 0.0022 0.0028 0.0032 0.0018 Table 26: Inter-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Sugar 0.1188 0.1956 0.2095 0.2052 0.1902 0.1688 0.2010 0.1990 Other Food Products 0.2793 0.2392 0.3354 0.2290 0.1854 0.2285 0.3315 0.4087 Beverages 0.0024 0.0033 0.0048 0.0063 0.0074 0.0131 0.0299 0.0344 Tobacco Products 0.0435 0.0690 0.0387 0.0324 0.0304 0.0344 0.0184 0.0165 Cotton Textiles 0.2430 0.3046 0.2208 0.2327 0.2306 0.1929 0.1709 0.2107 Wool, Silk,synthetic 0.0120 0.0181 0.0290 0.0359 0.0304 0.0338 0.0316 0.0427 Fibres Jute, Hemp, Mesta 0.0314 0.0432 0.0327 0.0286 0.0116 0.0224 0.0141 0.0127 Miscellaneous 0.0172 0.0299 0.0219 0.0338 0.0346 0.0636 0.0819 0.0845 Textiles Cement 0.0027 0.0042 0.0051 0.0048 0.0018 0.0028 0.0007 0.0014 Paints,soaps,drugs 0.0224 0.0186 0.0248 0.0169 0.0198 0.0118 0.0915 0.0350 Industries&Foundaries 0.0019 0.0026 0.0028 0.0029 0.0030 0.0028 0.0041 0.0084 Electrical Machinery 0.0028 0.0030 0.0017 0.0023 0.0029 0.0030 0.0092 0.0064 0.0029 0.0031 0.0020 0.0017 0.0023 0.0034 0.0033 0.0060 etc iron,Steel Miscellaneous Manufacturing Other Crops Table 27: Intra-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.0339 0.0429 0.0467 0.0630 0.0589 0.0240 0.0832 0.0665 Cash Crops 0.0091 0.0048 0.0064 0.0104 0.0055 0.0016 0.0049 0.0029 Plantation 0.0002 0.0002 0.0004 0.0003 0.0002 0.0003 0.0003 0.0002 Crops Other crops 1.0441 1.0282 1.0424 1.0500 1.0376 1.0153 1.0761 1.0234 Animal 0.0824 0.0778 0.0850 0.1000 0.0717 0.0434 0.0414 0.0387 Husbandry Table 28: Intra-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.0550 0.0523 0.0515 0.0390 0.0210 0.0116 0.0288 0.0365 Cash Crops 0.0112 0.0075 0.0086 0.0066 0.0043 0.0034 0.0084 0.0119 Plantation 0.0014 0.0034 0.0026 0.0025 0.0012 0.0008 0.0010 0.0019 Other crops 1.0441 1.0282 1.0424 1.0500 1.0376 1.0153 1.0761 1.0234 Animal 0.2663 0.2805 0.3462 0.2932 0.1901 0.1706 0.1998 0.1960 Crops Husbandry Table 29: Inter-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Other Food Products 0.0065 0.0048 0.0048 0.0034 0.0022 0.0018 0.0022 0.0031 Petroleum Products 0.0240 0.0478 0.0443 0.0462 0.0282 0.0161 0.0396 0.0244 Chemicals 0.0023 0.0058 0.0097 0.0257 0.0152 0.0174 0.0202 0.0131 Fertilizer 0.0181 0.0385 0.0552 0.1255 0.0659 0.0590 0.0661 0.0533 Paints,soaps,drugs etc 0.0073 0.0067 0.0116 0.0237 0.0300 0.0176 0.0154 0.0086 Industries&Foundaries 0.0057 0.0095 0.0083 0.0186 0.0122 0.0054 0.0068 0.0069 Metal Products 0.0016 0.0018 0.0024 0.0046 0.0021 0.0014 0.0024 0.0025 Other Machinery 0.0015 0.0048 0.0020 0.0048 0.0034 0.0019 0.0038 0.0051 equipment 0.0011 0.0009 0.0033 0.0051 0.0024 0.0012 0.0025 0.0032 Miscellaneous 0.0001 0.0002 0.0006 0.0025 0.0039 0.0023 0.0029 0.0013 Inorganic, organic iron,Steel Other transport Manufacturing Table 30: Inter-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Sugar 0.0025 0.0022 0.0023 0.0020 0.0059 0.0034 0.0031 0.0035 Other Food Products 0.0662 0.1179 0.1308 0.0932 0.0643 0.1619 0.1264 0.1612 Beverages 0.0014 0.0009 0.0011 0.0036 0.0023 0.0075 0.0077 0.0162 Tobacco Products 0.0049 0.0048 0.0064 0.0046 0.0020 0.0023 0.0010 0.0012 Cotton Textiles 0.0065 0.0068 0.0049 0.0081 0.0052 0.0046 0.0039 0.0059 Wool, Silk,synthetic 0.0076 0.0058 0.0063 0.0091 0.0055 0.0037 0.0029 0.0041 Fibres Miscellaneous Textiles 0.0034 0.0016 0.0011 0.0036 0.0025 0.0031 0.0051 0.0075 Paper&Printing 0.0027 0.0014 0.0016 0.0039 0.0057 0.0051 0.0037 0.0042 Products 0.0072 0.0067 0.0038 0.0048 0.0028 0.0021 0.0038 0.0069 Rubber&PLastic 0.0021 0.0019 0.0021 0.0049 0.0064 0.0052 0.0049 0.0082 Chemicals 0.0013 0.0014 0.0010 0.0039 0.0028 0.0055 0.0053 0.0072 Fertilizer 0.0007 0.0008 0.0010 0.0027 0.0020 0.0022 0.0015 0.0027 0.0184 0.0203 0.0204 0.0397 0.0461 0.0402 0.0224 0.0192 Industries&Foundaries 0.0029 0.0021 0.0019 0.0049 0.0047 0.0036 0.0055 0.0088 Electrical Machinery 0.0022 0.0019 0.0012 0.0036 0.0036 0.0035 0.0078 0.0061 0.0025 0.0012 0.0013 0.0045 0.0026 0.0028 0.0042 0.0063 0.0034 0.0021 0.0014 0.0020 0.0031 0.0037 0.0030 0.0070 Leather&Leather Inorganic, organic Paints,soaps,drugs etc iron,Steel Other transport equipment Miscellaneous Manufacturing nimal Husbandry Table 31: Intra-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.0923 0.0585 0.0533 0.0435 0.0355 0.0287 0.0360 0.0604 Cash Crops 0.0464 0.0114 0.0157 0.0122 0.0082 0.0059 0.0062 0.0106 Plantation 0.0012 0.0007 0.0013 0.0011 0.0007 0.0008 0.0009 0.0010 Other crops 0.2298 0.2063 0.2299 0.1626 0.1254 0.1848 0.1491 0.1765 Animal 1.0314 1.0250 1.0279 1.0230 1.0161 1.0127 1.0119 1.0156 Crops Husbandry Table 32: Intra-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Food Crops 0.1827 0.1541 0.1395 0.1054 0.0750 0.0462 0.1069 0.1080 Cash Crops 0.0382 0.0251 0.0237 0.0192 0.0174 0.0147 0.0383 0.0471 Plantation 0.0047 0.0122 0.0070 0.0081 0.0052 0.0034 0.0039 0.0088 Other crops 0.0711 0.0572 0.0564 0.0555 0.0473 0.0470 0.0309 0.0349 Animal 1.0314 1.0250 1.0279 1.0230 1.0161 1.0127 1.0119 1.0156 Crops Husbandry Table 33: Inter-linkage: Backward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Other Food Products 0.0679 0.0400 0.0389 0.0269 0.0226 0.0236 0.0245 0.0322 Cotton Textiles 0.0270 0.0060 0.0076 0.0061 0.0056 0.0041 0.0036 0.0078 Paper&Printing 0.0018 0.0018 0.0023 0.0030 0.0020 0.0018 0.0025 0.0030 Petroleum Products 0.0113 0.0152 0.0168 0.0129 0.0089 0.0077 0.0179 0.0144 Inorganic, Chemicals organic 0.0022 0.0028 0.0038 0.0056 0.0034 0.0060 0.0054 0.0056 Fertilizer 0.0059 0.0098 0.0150 0.0229 0.0103 0.0137 0.0115 0.0148 Paints,soaps,drugs etc 0.0076 0.0084 0.0075 0.0081 0.0083 0.0084 0.0069 0.0068 iron,Steel Industries&Foundaries 0.0047 0.0051 0.0059 0.0065 0.0051 0.0045 0.0043 0.0050 Metal Products 0.0021 0.0021 0.0027 0.0021 0.0012 0.0014 0.0020 0.0024 Other Machinery 0.0010 0.0020 0.0010 0.0015 0.0011 0.0010 0.0025 0.0043 Other transport equipment 0.0018 0.0007 0.0020 0.0021 0.0011 0.0008 0.0027 0.0034 Table 34: Inter-linkage: Forward Linkages 1973- 1979- 1983- 1989- 1993- 1998- 2003- 2007- 74 80 84 90 94 99 04 08 Sugar 0.0052 0.0053 0.0052 0.0042 0.0040 0.0027 0.0077 0.0098 Other Food Products 0.0467 0.0867 0.0855 0.0735 0.0744 0.1196 0.1126 0.0994 Cotton Textiles 0.0136 0.0112 0.0076 0.0072 0.0054 0.0038 0.0069 0.0124 Wool, Silk,synthetic Fibres 0.0219 0.0096 0.0136 0.0156 0.0084 0.0053 0.0039 0.0070 Miscellaneous Textiles 0.0047 0.0023 0.0017 0.0038 0.0025 0.0026 0.0065 0.0124 Leather&Leather Products 0.0256 0.0228 0.0101 0.0139 0.0104 0.0074 0.0156 0.0315 Rubber&PLastic 0.0018 0.0021 0.0021 0.0025 0.0022 0.0017 0.0056 0.0151 Paints,soaps,drugs etc 0.0068 0.0075 0.0072 0.0070 0.0070 0.0055 0.0119 0.0142 iron,Steel Industries&Foundaries 0.0035 0.0021 0.0015 0.0022 0.0020 0.0013 0.0024 0.0076 Electrical Machinery Other 0.0029 0.0014 0.0009 0.0016 0.0014 0.0011 0.0043 0.0061 transport equipment 0.0031 0.0012 0.0010 0.0021 0.0011 0.0009 0.0023 0.0066 Miscellaneous Manufacturing 0.0043 0.0022 0.0011 0.0027 0.0035 0.0031 0.0017 0.0055 ... global demand For example, PFCE on cotton textiles fell from 60% in 1983-84 to 53% in 2007-08, for wool, silk etc textiles it fell from 61% to 44% and for miscellaneous textiles it fell from 53% to... emphasized the small demand base from agricultural sector for the industrial products as one of the reasons for the stall in industrial growth In this context, it was argued by agrarianist school of thought... the system That is intermediate demand for its output is mostly from the parent sector FINDINGS Before we enter into complete analysis of backward and forward linkages of the sectors, it is important