THE PERSPECTIVE
The objectives in view are removal of poverty and achievement of self-reliance. This chapter seeks to delineate a desirable profile of development, indicating magnitudes which will help to determine options for long term investment and outlining strategies which will help to overcome the constraints in achieving the objectives. The strategies relate to growth in the three leading sectors, viz., agriculture, energy and critical intermediates and the creation of additional employment opportunities.
Agricultural Sector 2.2. This is the most vital sector. Gross domestic product at 1960-61 prices, from the agricultural and allied sectors, increased at an annual compound trend rate of 2.07% during the period from 1961-62 to 1973-74. Table-1 shows that growth in output of foodgrains in the same period is estimated at 2.72% per annum.
Table 1. Annual Compound Growth Rates *1 of Output for Selected Crops
During 1961-62 to 1973-74.
crop growth rate(%)
(0) (1)
1. rice 2.08
2. wheat 8.85
3. jowar (-) 0.87
4. bajra 4.39
5. maize 3.21
6. total cereals 3.16
7. total pulses (-) 0.51
8. total foodgrains 2.72
9. sugarcane (cane) 2.37
10. cotton (lint) 1.17
11. jute (-) 0.87
12. mesta (-) 3.81
13. oilseeds (5 major) 1.26
14. all crops *2 2.45
1 Estimated from semi-log regressions of output data in quantities on
time.
2. Based on Index Numbers of Agricultural Production.
2.3. Neither for the country as a whole nor for any of the States was the output of foodgrains consistently below the estimated trend levels after 1970-71. Thus, there is no evidence to suggest that the foodgrains economy stagnated in the early seventies.
2.4. Studies in growth of output and patterns of growth of input show that in certain regions of the country growth in production of foodgrains is primarily explained by spread of irrigation and multiple cropping, while in others it is due to water, seed and fertiliser technology. The picture varies from district to district. Table-2 presents a comparative analysis of the levels of agricultural development in the triennium 1970-71 to 1972-73 based on District level data on gross value of output per hectare and indicators of input such as gross cropped area, consumption of fertilisers, use of tractors, installed pump sets and gross irrigated area. In the early Seventies the gross value of cropped output per hectare was above Rs. 1500 per annum only in 15 per cent of the gross cropped area. This relatively developed part of the rural economy accounted for 27.84 per cent of the aggregate output and approximately 40 per cent of most of the major inputs such as fertilisers, and pump sets. On the other hand, the gross value of cropped output per hectare was less than Rs. 1000 per annum in 60 per cent of the total cropped area, and it accounted for roughly one-third of the total inputs used in the rural sector. Table-3 shows that in growth of agricultural output, rates higher than 5 per cent compound per annum have been achieved in the trienniums, 1962-63-1964-65 to 1970-71-1972-73, in approximately 12 per cent of the districts of India, accounting for about 14 per cent of the gross cropped area and approximately 20 percent of most of the major inputs. In approximately 30 per cent of the districts, account- ing for approximately equal share of the gross cropped area and a somewhat higher share of major inputs, the growth rate of agricultural output has been higher than 3 per cent compound per annum. In another third of the districts accounting for 30.98 per cent of the gross cropped area, the rate of growth has been estimated between 1 to 2.99 per cent compound per annum. This class of districts corresponds to the modal class and the average growth rate of the agricultural sector also falls in it. The remaining districts showed a growth performance of less than 1 per cent compound per annum. The future strategy will need to take note of these factors.
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2.5. The strategy for long term planning of the agricultural sector centres round detailed assessment and exploitation of ground and surface water, intensification in application of new technologies in agriculture, extension mechanisms and programmes for supply of inputs, apart from attention to the special needs of problem areas and vulnerable sections of the society.
2.6. The growth rate in gross cropped area in the period 1961-62 to 1972-73, is estimated at 0.54 per cent compound per annum. Based on an elasticity of multiple cropping with respect to gross irrigated area, the National Commission on Agriculture has estimated a growth rate of 0.66 per cent compound per annum in the gross cropped area from 1970-71 to the year 2000. The estimated elasticity of gross cropped area with respect to gross irrigated area for the country as a whole, is 0.20. An increase of 4 per cent per annum in gross irrigated area can be safely postulated for the Fifth Plan. This growth rate will need to be intensified in the later Plan periods. On a somewhat conservative basis, the gross cropped area can be postulated to expand by 0.7 per cent per annum in the Fifth Five Year Plan period and by about 0.6 per Cent per annum in the subsequent period.
2.7. The growth rate in the gross cropped area under foodgrains between 1961-62 and 1972-73 is estimated at 0.49 per cent compound per annum. The growth rate for the Fifth Plan period is postulated at 0.6 per cent per annum. The trend of diversification to non-foodgrains crops is expected to be maintained in the later Plan periods. As regards individual food crops, the growth rate of irrigated area under paddy is likely to be higher than that under wheat. Recent evaluation also suggests that while the expansion of area under high yielding varieties of paddy will be considerably intensified in the Fifth Plan period, area under irrigated wheat is likely to be entirely covered by high yielding varieties during this period. High yielding varieties in jowar and some other cereals offer sufficient promise, provided problems relating to pest resistance can be controlled. Exercises in the Planning Commission suggest that towards the end of the next decade, the irrigated area under foodgrains must rise to around 45 per cent of the total area under foodgrain crops.
2.8. The second factor in higher production of foodgrains is increase in yield by 3 per cent per annum during the Fifth Five Year Plan period. The increases in yield are derived from the increases in input. Somewhat conservative assessments are at present stipulated for yield level possibilities for each crop separately for differing agronomic conditions. However, technological assessments as well as comparative analysis within homogeneous agroclimatic regions suggest that higher yield levels are possible.
2.9. Annexure I gives State-wise position regarding the areas that have been covered by systematic geological surveys. However, 63 per cent of the coverable area has not yet been investigated. The gap is wider for the States of
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North Eastern Region, Eastern Region (excepting West Bengal), Central Region and Southern Region, which include some of the drought prone areas in the country. In the absence of more reliable data from surveys and exploration, the ultimate potential of ground water can be tentatively placed at 35 million hectares.
2.10. Allocation of funds for systematic evaluation of the country's ground water resources has been considerably increased in the Fifth Plan. With the availability of more information, it should be possible to develop a detailed land utilisation plan and a coordinated plan for the utilisation of surface and ground water in the Sixth Five Year Plan period and beyond. Such a plan for the national economy needs to be integrated with the local and regional development plans,
Demand for Foodgrains 2.11. Estimation of demand for foodgrains is sensitive to the assumptions made on growth and distribution of income. Based on the realised levels of growth of income upto 1975-76, the target of 5.2 per cent per annum of compound income growth in the remaining years of the Fifth Five Year Plan and the estimated relationships between purchase of foodgrains and growth in total consumption expenditure per capita, the demand for foodgrains in 1978-79 is estimated at 127.69 million tones. The targets of income growth presently postulated for the Sixth and the Seventh Plan periods lead to estimates of the demand for foodgrains at 150.9 million tonnes and 178.2 million tonnes respectively, provided the elasticity of demand of foodgrians to consumption expenditure remains constant. These projections are consistent, both methodologically and in quantities, with the upper limit of requirements of foodgrains in 1985 estimated by the National Commission on Agriculture to be within a range of 150 million tonnes to 163 million tonnes. However, there is a possibility that the demand for foodgrain will slacken in the perspective period on account of the growth in per capita consumption expenditure placing a larger proportion of consumer households in the higher expenditure brackets. This is particularly so since the behaviour of households in purchase of foodgrains varies markedly between households in the different expenditure brackets. The demand for non-foodgrain agricultural products will intensify with the diversification of the basket of consumer expenditure in relation ship with higher levels of living. If the demand for foodgrains reaches 180 kgs. per capita per annum in 1983-84, the aggregate requirement of foodgrains will be 143.5 million tonnes. As for the following five year period the requirement will be 161 million tonnes by 1988-89, if the per capita demand is taken at 190 kgs. On current indications, it will be prudent to plan for a requirement of foodgrains within a range of 161 million tonnes to 170 million tonnes (implied per capita availability being 200 kgs) by 1988-89 and to firm up these estimates in the Sixth Plan.
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Non-foodgrain Crops 2.12. The same strategy, namely of increasing the area under irrigation and of intensifying the spread of the available high yielding varieties, applies to non-foodgrain crops. The expansion of irrigation facilities in sugarcane and in cotton is expected to continue. It is expected that demand should balance supply in the early part of the Sixth Plan period. The situation with regard to oilseeds is more uncertain on account of the area under irrigation being small and so the need for imports cannot be ruled out. Even with the postulation of a tight land balance, the expected rate of growth in the non-foodgrains crop is presently estimated at 3.94 per cent per annum in the Fifth Plan period, rising to 4.96 per cent per annum in the Seventh Plan period. Given the growth rates in the animal husbandry, fishing and forestry sectors, the rate of growth of the agricultural sector as a whole is postulated at 3.94 per cent in the Fifth Plan period and at approximately 4.30 per cent through the Sixth and Seventh Plan periods.
Fertilisers 2.13. The estimation of fertiliser demand is sensitive to the increase in irrigation facilities and the spread of new technologies. The demand is estimated in terms of nutrients at 4.80 millions tonnes in 1978-79 and approximately 8 million tonnes in 1983-84. Suitable investment decisions in relationship to these fertiliser demands are being made in the area of nitrogenous and phosphatic fertilisers. Still there will be some area of uncertainty in 'estimation of demand arising both from the lack of fully disaggregated data and relationship of fertiliser applications to behavioural responses. Any spurt in demand may, therefore, have to be met from imports. The requirments of potassic fertilisers will continue to be met substantially out of imports.
Forestry 2.14. The forestry sector has to play an important role in the economic development of the country. Forests occupy about 23 per cent of the area and their contribution in the net domestic product at 1960-61 prices is 1.4 per cent. The targets of demand for industrial wood for the perspective period are consistent with the projections of the National Commission on Agriculture. The problems relating to the forestry sector are mainly Organisational. In view of the tight land balance being anticipated, coverage by forests has to be integrated with the land utilisation plan. Development of communications is also necessary in relation to the optimal exploitation of the available forest wealth in inaccessible areas.
The Energy Sector 2.15. Issues relating to energy planning have been fully examined. Given
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the non-renewable resource base of the economy, the main emphasis is on coal, electricity and crude oil and substitution of imported source of energy wherever possible. These three leading sectors of energy accounted for 3.96 per cent of the gross value added in the non- agricultural sector in 1973-74. This share is expected to go up to 5.00 per cent by the end of the Fifth Plan period and 5.56 per cent by the end of the Sixth Plan.
2.16. The revised production estimate for the coal sector is placed at 124.0 millon tonnes in 1978-79 and is estimated to go up to 185 million tonnes in 1983-84. Long term rates of growth of between 7 to 8 per cent compound per annum for this sector are expected to be sustained through the Seventh Plan period also.
2.17. The power generation programme together with minimisation of transmission and distribution losses, aims at meeting the anticipated demand of about 90 billion Kwhs by 1978-79. The rationalisation of power rates is also expected to lead to a more optimal pattern of energy consumption and restrict relatively inessential use. Energy consumption at the end of the Sixth Plan period is presently estimated tentatively at 138 billion units. Taking into account the regional dimensions, peak demand and rationalisation of the transmission and distribution system, investment planning decisions are under way to meet this requirement. The electricity sector is expected to maintain a growth rate of between 8.5 to 9.5 per cent per annum through the Seventh Plan. The slight deceleration in the growth rate is consistent with international experience of the declining elasticity of electricity consumption in relation to income growth at higher levels of industrialisation.
2.18. Consumption of refinery products grew at a rate of 8.5 per cent compound per annum in the period from 1960 to 1973. With suitable fiscal measures and appropriate restrictions on the non- essential use of oil products, the consumption in 1974-75 was reduced to the 1972 levels and further demand controlled. The requirements of petroleum products are expected to be of the order of 28.5 million tonnes in 1978-79, even after taking into account the needs of the critical sectors like fertilisers, transport, irrigation, industry and domestic fuel. Simultaneously intensified exploration and processing is likely to give a production of 14.18 million tonnes of crude oil by then, as against the target of 12 million tonnes in the Draft Plan. The crude oil sector is expected to grow at a rate of 14.68 per cent during the period of the Fifth Plan. By 1983-84, the production level is tentatively expected to be 22 million tonnes. The refining capacity in the country will be about 31.5 million tonnes by 1978-79; and this is expected to increase during the Sixth Plan. It is estimated that till 1980-81, there will be no need to raise the absolute level of import of crude oil.
2.19. The Fuel Policy Committee has estimated that the share of non-commercial energy in the domestic sector will decrease from 80 per cent in
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1978-79 to 60 per cent by the end of the Seventh Plan. Against the estimated availability of 94 million tonnes of forest fuels, the demand is placed at 132 million tonnes in 1978-79 and 122 million tonnes in 1990-91. The need for a coordinated policy towards development of forests and use of soft coke appears inescapable.
Long Term Perspective for Non-Renewable Resources 2.20. Planning for critical intermediates must have relation to the nonrenewable resource base, since even with recycling, the recovery ratio is less than unity. Major objectives for the development of non-renewable resources from the land and the sea, can be stated as follows :
(a) To prepare detailed inventory of natural resources;
(b) to supply the growing needs at minimum social cost;
(c) to utilise nation's non-renewable resources at optimal depletion rate;
(d) to achieve self-reliance in terms of technology, production and conservation;
(e) to utilise the possibilities of international trade that are consistent with other long-term Plan objectives;
(f) to utilise re-cycling possibilities; and
(g) to undertake research and development.
2.21. In the present stage of industrialisation, the elasticity of mineral consumption with respect to growth of either GDP or manufacturing activity exceeds unity. This experience is consistent with the historical experience of other countries in similar stages of industrialisation.
2.22. Annexure 2 shows the status of geological mapping in India. Despite considerable efforts, only 46.14 per cent of the total geographical area of the country has been geologically mapped on the scale of 1 : 50000. Geological mapping should have priority in the overall programme of land use and planning utilisation of non- renewable resources.
2.23. Annexure 3 indicates the recoverable reserves as a percentage of total reserves. Reserves of the measured categories, which are the outcome of detailed investigations, are smaller than the requirements for future long-term resource planning. In case of strategically important minerals like kyanite, barytes,
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chromite, etc. the bulk of the reserves are yet only of the inferred category. Unless detailed exploration is done for these minerals, exploitation may lead to unnecessary extra costs to the economy. Given the fact that the exploration of the nonrenewable resources should be planned within a long-term framework, it is possible that private lease-holds may indulge in socially undesirable decisions on the rates of depletion. Thus a policy perspective needs to be developed.