Agriculture-Industry Relations : A Critique of the Orthodox Discourse

We analyse in this book the linkages between the industrial sector of a developing economy and other sectors - specifically agricultural sector, the government and the rest of the world. In the context of demand, our basic position is that, an export surplus of industry vis--vis the rest of the world and an appropriate government intervention through 'domestic exports' can mitigate the problem of effective demand faced by the industrial sector. On the other hand, we recognize that the foreign exchange constraint and the food constraint can present supply side bottlenecks for industrial expansion. However, a complementarity between different demand and supply side policies are crucial for an expansion of industrial output and employment without involving distributional conflict between different classes of people and without any capital flow between different sectors. But, before going to these theoretical questions we discuss in detail the food-supply situation and the corresponding demand-supply gap for India, as food-supply constitutes a significant supply-side factor in our macro framework. With this background, we formulate our structuralist model for the Indian economy.