Wednesday, 7 November 2012

Structural transformation of the Gujarat economy

Let us consider and annotate from an article by Anita Dixit in the Economic and Political Weekly (Dixit.A, Economic & Political Weekly, December 12, 2009 vol xliv No 50)which discusses the share of agriculture in the state economy vis a vis other sectors in a high growth state like Gujarat. It is not just recently that the state of Gujarat has been considered a high growth state, its performance has always been better than the All-India in terms of economic growth.

 The basic conclusion of the paper is that the agricul­tural sector still has a pivotal role to play in the overall growth of the state, in spite of its low and declining role in the NSDP. Especially in the post-liberalisation years, the relation between the agricultural and industrial sectors has grown stronger. Since commercial (and not foodgrain) crops contribute the major share of agri­cultural production, it is reasonable to conclude that the agricultural sector is a provider of raw materials and not of wage goods. However, the emphasis on develop­ment of commercial crops in the state has not resulted in higher incomes in the agri­cultural sector itself. There is therefore need for public investment in agriculture, in order to improve both productivity and incomes in the sector.

My Conclusion-
1)Agriculture needs public investment support in Gujarat
2)Despite being an urban state,services need to grow more.
3)The agricultural sector has served to fuel economic growth in other sectors, but that economic growth has n
ot fed into the sector itself.
4)After the 1980s the Gujarat economy has progressed to the second stage of
economic growth. However, the integral relationship between the agricultural and non-agricultural sectors still continues.Agriculture is important in providing inputs.The distributive aspect is important-It is necessary to ensure that the emphasis on commercial crops translates into regionally widespread incomes for the broad population involved in agriculture.
5)Agricultural Growth in Gujarat is still not weather proof..

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