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The Dragon and the Elephant: Lessons from Chinese Reforms for Reforming India’s Agriculture

22 Nov 2017
Prof. Ashok Gulati | Ms. Smriti Verma
Venue: Conference Room, ICWA (Sapru House)
Time: 3:00 PM

Brief: Ashok K. Kantha, Director, ICS

 

Abstract

China-the dragon, started off its economic reforms in 1978 with focus on agriculture. The twin approach adopted was replacing the commune system in land by household responsibility system and liberating the agri-prices from too much government control. As a result, during 1978-84, Chinese agri-GDP increased by 7 percent per annum and farm incomes in real terms by 15 percent per annum. The Chinese poverty declined from 33 percent to 15 percent in just six years! Rising incomes in rural areas generated demand for manufactured goods, triggering a manufacturing revolution by Town and Village Enterprises (TVEs). When the masses gained, it provided political legitimacy to reformers to further pursue economic reforms.

In contrast, India-the elephant, started reforms by stealth, by liberating trade and industrial licensing policy. It impacted agriculture only indirectly. There were no major reforms directly aimed at agriculture. A result of this strategy was that India took 18 years to half its poverty from 45 percent in 1993 to 22 percent in 2011. Lately, agriculture is in increasing distress, with agri-GDP growth collapsing to just 1.8 percent per annum in the first three years of NDA period (2014-15 to 2016-17). Agriculture’s neglect does not augur well for the country as it engages 47 percent of the workforce, and without its turn around, ‘sabka saath, sabka-vikas cannot be achieved. And without masses gaining, broad-based demand for industrial goods cannot be created. India will do well by taking a leaf from the Dragon’s experience in this regard and reform its agriculture with positive incentives, propelling investments, and changing institutions to make Indian agriculture profitable, productive and sustainable. It can then also then help trigger a manufacturing revolution by increasing demand for manufactured products at mass scale.   

 About the Speakers

Ashok Gulati is currently Infosys Chair Professor of Agriculture at Indian Council for Research on International Economic Relations (ICRIER). He is an eminent Indian agricultural economist and a former Chairman of the Commission for Agricultural Costs and Prices (CACP), Government of India (2011-14). He was Director at the International Food Policy Research Institute (IFPRI) for more than 10 years (2001-11). He worked as a Chair Professor NABARD at Institute of Economic Growth (1998-2000), and prior to that he was Director/Chief Economist, Agriculture, and Rural Development at National Council of Applied Economic Research (NCAER) from 1991 till 1997. Dr. Gulati has been deeply involved in policy advice in India for a long number of years. For his contributions to the field, the President of India honored him with ‘Padma Shri award’ in 2015. He has served in both academic and policy advising capacities in India. He has 14 books to his credit on Indian and Asian Agriculture. He has been a prolific writer in several leading daily newspapers in India, with his current column ‘From Plate to Plough’ in the Indian Express and Financial Express. He is currently on the Board of Directors of several organizations.  

Smriti Verma is an economic researcher working on economic policy research, with a focus on agricultural, farm and food policy in India, in relation to the rest of the world. She is presently working as Consultant at ICRIER. Smriti holds an MSc in Economics for Development from the University of Oxford in the United Kingdom; she completed her BA (Hons) in Economics from Lady Shri Ram College for Women, New Delhi. She is working under the ICRIER - Bill and Melinda Gates Foundation (BMGF) project under which she has conducted an extensive study of the state of agriculture in Uttar Pradesh – the fifth largest and most populated state of India – analyzing the sources and drivers of agricultural growth in the state in the past two decades and recommending policy actions for higher agricultural growth in the short-to-medium term. She also worked in the states of Punjab and Madhya Pradesh on similar lines. Smriti is involved in evaluating the efficiency of value-chains for high-value commodities in India based on case-studies from various states in India for different commodities under the National Bank for Agriculture and Rural Development (NABARD). Her areas of interest are agricultural policies, macroeconomics, monetary and trade economics. 

 
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