Agriculture sector appears to be adversely affected by the reform process. Why?
The agriculture sector appears to be adversely affected by the reform process due to several reasons:
Firstly, the growth rate in agriculture has been decelerating as reforms have not been able to benefit this sector. There has been a decline in public investment in agriculture since 1991, especially in crucial infrastructure such as irrigation, power, roads, market linkages, and research and extension. These areas had played a vital role in the success of the Green Revolution.
Secondly, the partial removal of fertiliser subsidy has led to an increase in the cost of production, which has severely affected small and marginal farmers who are particularly vulnerable to such cost increases.
Thirdly, several policy changes have adversely impacted Indian farmers. These include reduction in import duties on agricultural products, low minimum support price, and lifting of quantitative restrictions on imports of agricultural products.
As a result of these changes, Indian farmers now have to face increased international competition, making it difficult for them to compete effectively. The reform process has thus failed to address the basic problems facing the agriculture sector.
Explanation
This answer covers all the key points from the textbook context: (1) decelerating growth rate and lack of benefits from reforms, (2) decline in public investment in agricultural infrastructure, (3) removal of fertilizer subsidy affecting small farmers, (4) policy changes including import duty reductions, low MSP, and removal of quantitative restrictions, and (5) increased international competition. The answer is structured in 5 paragraphs with key terms bolded, suitable for a 5-mark long answer question.