Agriculture was chosen as the Prime Moving force of the economy since 2002 on the advice of the Plan...........

Economic Affairs Others

Agriculture was chosen as the Prime Moving force of the economy since 2002 on the advice of the Planning Commission. As a major policy shift, it was aimed at solving which of the following issues affecting the Indian Economy?

Boosting aggregate demand in the economy
Ending the production monopoly of the PSUs in the agricultural sector
Increasing rural employment

Select the correct answer using the codes below.

3 only

1 and 3 only

1, 2 and 3

1 and 2 only

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Explanation:

Statement 1: Agriculture is a key feed to other industries, for e.g. food processing sector. An increase in agricultural growth directly translates to a growth in other sectors of the economy.

Statement 2: The movement was intended not to cut down competition in any particular sector of the economy rather to facilitate growth in all the sectors.

Statement 3: Investment in agriculture also involves creation of capital goods such as warehousing, irrigation infrastructure which both directly and indirectly generates employment.

The other major challenges to be solved were:

Food Security, which in a sense means ensuring adequate infrastructure in rural areas in agriculture. It is because food security is not just about productivity; it is also about accessibility of food.
Market Failure: It also had to solve the case of India being a market failure. It means that goods and services are available in the economy, but there is little demand.

This is because majority of population lives on agriculture which does not provide them with good purchasing power. With this policy shift their incomes were supposed to be improved and market demand be boosted. This would also involve generating more rural employment.