Prime Moving Force of India’s Development: Agriculture vs. Industry

Introduction

At the time of Independence, India faced a fundamental developmental dilemma: Which sector should act as the Prime Moving Force (PMF) of growth – agriculture or industry?
Agriculture was the backbone of livelihood for the majority, while industry promised modernization, productivity, and long-term competitiveness. This debate shaped the trajectory of India’s economic planning and continues to remain relevant in development economics.

Background

1. 1938 – National Planning Committee: Chaired by Jawaharlal Nehru, it emphasized industrialisation as the foundation of growth.
2. 1950 – Planning Commission: Established with a vision to make industry the PMF.
3. This gave rise to one of the most significant debates in Indian economic policy: Should development be agriculture-first or industry-first

Arguments in Favour of Agriculture as the Prime Moving Force

1. Employment and Poverty Reduction
   1. In the 1950s, nearly 70% of India’s population depended on agriculture.
   2. Agricultural growth was critical for mass employment generation and reducing rural poverty.
2. Food Security and Raw Materials
   1. Agriculture ensured a stable food supply.
   2. It also provided raw materials like cotton, jute, and sugarcane for agro-based industries.
3. Market Creation for Industrial Goods
   1. Rising rural incomes stimulated demand for manufactured goods, ensuring industrial viability.
4. Sustainability of Industrial Growth
   1. Weak agriculture could lead to shortages, inflation, and rural distress – all of which undermine industrial progress.
5. Empirical Evidence – The Green Revolution
   1. The Green Revolution in the 1960s demonstrated that agricultural growth directly reduced poverty and supported overall development.

Case for Industry as the Prime Moving Sector

1. Higher Productivity
   1. Industry delivers significantly higher output per worker compared to agriculture.
2. Structural Transformation
   1. Industrialisation leads to urbanisation, economic diversification, and modernisation.
3. Export Competitiveness
   1. Manufactured goods provide higher value addition and earn greater foreign exchange than primary products.
4. Technological Advancement
   1. Industry drives innovation, research and development (R&D), and adoption of modern technologies.
5. Global Historical Experience
   1. Western nations achieved rapid growth through the Industrial Revolution rather than agricultural expansion.

India’s Policy Choice

1. Nehruvian–Mahalanobis Strategy (Second Five-Year Plan): Heavy industries were prioritised as the PMF of development.
2. Agriculture in Secondary Position: Initially neglected, but the food crisis of the 1960s forced a policy rethink.
3. The Green Revolution (Mid-1960s): Re-established agriculture as a priority, leading to self-reliance in food.
4. Post-1991 Economic Reforms: India shifted towards a balanced growth model, where agriculture, industry, and services were given equal importance.

Conclusion

1. Agriculture provides the essential foundation of livelihood, food security, and raw materials, while industry ensures higher productivity, structural transformation, and technological advancement.
2. India’s development experience highlights that neither an agriculture-first approach nor an industry-first approach is sufficient in isolation. The real Prime Moving Force must be a balanced and integrated growth model, where:
   1. Agriculture secures the base of employment and subsistence.
   2. Industry drives modernisation and competitiveness.
   3. Services act as a growth accelerator in the later stages.
3. This holistic approach remains the cornerstone of India’s long-term and inclusive economic development.