for agriculture will lead to higher income only to the large and medium
farmers.
24
With increasing farm incomes the demand for industrial goods - both
for consumer durables and non-durables - would grow substantially, but the
rate of expansion is expected to be higher for the former. On the other hand, the
same force (i.e. the favouralbe TOT for agriculture) may not necessarily
improve the real income of the rural poor, especially of the landless and
marginal farmers. In fact, this would inevitably lead to a fall in the real incomes
of rural poor (Rangarajan, 1982 and Nachane et al, 1989), and thereby, results in
stagnation or deceleration in growth of their demand even for consumer non-durable goods. If the gains of rural income growth are shared to a large extent by
the relatively better off section, i.e. the surplus farmers, traders, moneylenders
etc., the demand for consumer durable goods would expand at a faster rate,
whereas that for consumer non-durable goods may fail to pick up and stagnant at
a low level (Nachane et al., 1989). Thus, given the two conflicting nature of
impact, i.e. the supply side and demand side impacts, and the differentiated
impact on different sections of the society the effect of TOT on the production and
demand linkages between agriculture and industry should be examined carefully.
Apart from these measurement issues, the severe barrier encountered in
analyzing the sectoral linkages in Indian economy has been the lack of reliable
and comprehensive long run time series database of agricultural statistics. A
long run time series data on variables like HYV seeds, fertilizers, pesticides etc.
is hardly available, and even available it is difficult to get in the public domain.
This data base problem does not allow carrying out a sectoral linkages analysis
with a broader coverage of sectors as well as variables.