A study of linkages between agriculture and industry: the Indian experience
Interlinkages between the agricultural and industrial sectors of the Indian economy are analyzed within the framework of a macroeconomic model. Section 1 presents an overview of the trends in the growth of agriculture and industry covering the period 1960/61 to date. Section 2 sets out the principal linkages between the two sectors. Section 3 presents the model, its specifications as well as the DLS estimates derived from using time series data for the period from 1960/61-1979/80. Section 4 analyses three simulations of the model with a view to tracing the effect of specified changes in the agricultural sector on the endogenous variables of the model. More specifically, the model is used alternatively to trace the effect of 'no drought' in 1974/75 and an increase in the trend growth rate of the output of food grains and non-food grains. The impact of an increase in terms of trade is also analyzed. Results indicate a one-time increase in agricultural value added (due to better weather) leads not only to an increase in the growth of value added in consumer goods industries but also to that in the basic and capital goods industries. An increase in the trend rate of growth of agriculture (due to technological change, for example) also leads to a positive effect on the growth of consumer goods industries as well as heavy industries, although the total effect on the industrial growth rate is low. The result also indicates a positive effect on the tertiary sector. An increase in the food grains terms of trade, on the other hand, has a negligible effect on the growth of the industrial sector or that on the economy at large. c CAB International
| Main Authors: | , , , |
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| Format: | Texto biblioteca |
| Language: | eng |
| Published: |
Basingstoke, Hamshire (RU) Macmillan
1988
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| Summary: | Interlinkages between the agricultural and industrial sectors of the Indian economy are analyzed within the framework of a macroeconomic model. Section 1 presents an overview of the trends in the growth of agriculture and industry covering the period 1960/61 to date. Section 2 sets out the principal linkages between the two sectors. Section 3 presents the model, its specifications as well as the DLS estimates derived from using time series data for the period from 1960/61-1979/80. Section 4 analyses three simulations of the model with a view to tracing the effect of specified changes in the agricultural sector on the endogenous variables of the model. More specifically, the model is used alternatively to trace the effect of 'no drought' in 1974/75 and an increase in the trend growth rate of the output of food grains and non-food grains. The impact of an increase in terms of trade is also analyzed. Results indicate a one-time increase in agricultural value added (due to better weather) leads not only to an increase in the growth of value added in consumer goods industries but also to that in the basic and capital goods industries. An increase in the trend rate of growth of agriculture (due to technological change, for example) also leads to a positive effect on the growth of consumer goods industries as well as heavy industries, although the total effect on the industrial growth rate is low. The result also indicates a positive effect on the tertiary sector. An increase in the food grains terms of trade, on the other hand, has a negligible effect on the growth of the industrial sector or that on the economy at large. c CAB International |
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