India Agriculture & Economy Facts

India Agriculture & Economy Facts

Noteworthy Facts

Agriculture and Food Production

• India is in the first position in the production of milk.

• The highest producer of milk in India is Uttar Pradesh.

• According to ICAR, India is the second largest producer and exporter of tobacco, after China and Brazil, respectively.

• India is the second largest producer of fruits and vegetables, according to the second AE for 2022-23.

• As of 20 Feb, 2024, the position of India is first as a producer of pulses.

• Maharashtra is the 1st state that accorded the status of industry to agriculture in 1997.

Institutions and Industries

• The Central Agmark Laboratory is in Nagpur.

• The first cotton industry of the country was established at Fort Gloster near Kolkata in 1818, and the second by Kovas Jee Nana Bhai Daber in Mumbai in 1854 and was named Bombay Spinning and Weaving Company.

• Sindri Fertilizer Factory, Chittaranjan Locomotives, Indian Telephone Industry, Integral Coach Factory, Penciline Factory, and Indian Telephone Industry were all established during the first Five Year Plan.

Some Definitions

Rules of Origin

• According to the WTO, rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.

• Rules of origin are used to:

  1. Implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures.

  2. Determine whether imported products shall receive most-favored-nation (MFN) treatment or preferential treatment.

  3. For the purpose of trade statistics.

  4. For the application of labeling and marking requirements.

  5. For government procurement.

Forex Reserves

• According to ET, Forex reserves are foreign currency assets held by the central banks of countries. These assets include foreign marketable securities, monetary gold, special drawing rights (SDRs), and reserve positions in the IMF.

• The main purpose of holding foreign exchange reserves is to make international payments and hedge against exchange rate risks.

Infant Mortality Rate

• According to WHO, infant mortality rate is the probability of a child born in a specific year or period dying before reaching the age of one, if subject to the state.

• It is strictly speaking not a rate (i.e., the number of deaths or age-specific mortality rates of that period, divided by the number of people at risk during a certain period of time) but a probability of death derived from a life table and expressed as a rate per 1000 live births.

Human Capital Formation

• According to the World Bank, human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, enabling them to realize their potential as productive members of society.

• In other words, we need good human capital to produce other human capital (say, doctors, engineers...). This means that we need investment in human capital to produce more human capital out of human resources.

Production Linked Incentive (PLI)

• An initiative that provides incentives to domestic industries to boost local production.

Money Supply Concepts

• Narrow Money (M1): The sum of currency in circulation and demand deposits with banks.

• Broad Money: Usually, time deposits are much larger than both currency in circulation and demand deposits. The sum of M1 and time deposits is called broad money.

• High-Powered Money: The sum of currency in circulation with the public and cash reserves held by banks. This is called high-powered money because it forms the base on which money stock is created as a multiple. A part of the monetary base is held by banks as a cash reserve ratio, which is a fraction of the deposits created by the banking system. This proportion is determined by the central bank.

Fiscal Concepts

• Gross Primary Deficit: Gross Primary Deficit is Gross Fiscal Deficit less interest payments. Net primary deficit is net fiscal deficit minus net interest payments. Net interest payment is interest paid minus interest received.

• Fiscal Deficit: This difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

Final Thoughts

India holds a leading position in agriculture and food production, being the top producer of milk and pulses, while states like Uttar Pradesh and Maharashtra play key roles in these achievements.

The country is also a major player in tobacco, fruit, and vegetable production. Over the years, several important industries, from cotton and fertilizer factories to locomotives and telecommunication units, were established to boost economic growth. Institutions like the Central Agmark Laboratory in Nagpur ensure quality standards in agriculture and trade.

Forex reserves protect against currency risks, infant mortality rate reflects child health, and human capital formation emphasizes the value of education, skills, and health. Concepts like fiscal deficit, gross primary deficit, and money supply (narrow, broad, and high-powered money) explain how the government and banking system manage the economy.