Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

T. Palanivel ¹

Affiliations
1 Institute of Economic Growth, Delhi, IN

Abstract

Development theory suggests that a transfer of resources from agriculture to industry constitutes a necessary condition for the development of developing economies. There are notable exceptions to this proposition which argues that in the contemporary Asian context many economies would actually require a reverse tranfer of resources into agriculture. Only through a detailed study of long run Inter-Sectoral resource flows can one establish either poinl of view. Utilising a more appropriate and camprehensive Time series data and methodology. This paper attempts to establish as firmly as possible the precise emperical position regarding net resource flow between agriculture and non-agriculture in India during the period, 1950-51 to 1981-88. Our estimates indicate that there has been a net resource inflow into the agricultural sector in India. The quantum of this inflow showed a fluctuating trend in real terms (increaving milry in nominal terms) up to the mid-sixties. But has tended to increase quite sharply. Both in nominal and real terms, since the mid-sixties. Our analysis suggests that the observed resource inflow takes place through public institutions and the government exchequer.

Full Text

     

T. Palanivel

Abstract

In the context of on-going structural stabilization and adjustment programmes, it is necessary to examine the impact of changes in agricultural and foodgrains terms of trade on the incomes of various socio-economic groups, agricultural real wages and rural poverty in India. A change in agricultural terms of trade causes a considerable change in the relative distribution of income not only between agricultural producers and consumers but among income classes as well. However, the impact of changes in agricultural (foodgrains) terms of trade on the real incomes of the various groups can not be measured easily. Different groups may be affected differently. Moreover, the immediate impact may be quite different from the intermediate and long-run effects. In this paper, an attempt has been made to examine the relationship between terms of trade, on the one hand, and income distribution, agricultural real wages and poverty, on the other hand. Among the important overall tendencies, we highlight the following: (i) the agricultural terms of trade seems to be an important determinant of the distribution of income, (ii) the real agricultural wage rate is inversely related to agricultural terms of trade, at least in the short-run, and (iii) the agricultural terms of trade is positively related to the rural poverty.

Full Text