India being a predominantly agrarian economy and an agro-based industrial
structure, the interrelationship between agriculture and industry has been one
of the major issues for the researchers and policy makers since the beginning of
the planning period. In the pre and early post-independence period, the
industry sector had a close relationship with agriculture due to the agro-based
industrial structure (Satyasai and Baidyanathan, 1997). Satyasai and
Viswanathan (1999) found that the output elasticity of industry with respect to
agriculture was 0.13 during 1950-51 to 1965-66. Rangarajan (1982) has found
that a 1.0 percent growth in agricultural production increases industrial
production by 0.5 percent, and thus, GDP by 0.7 percent during 1961-1972.
However, the industrial sector witnessed a slow growth, followed by