The Effects of Structural Transformation of the Indian Economy on the Land Use Pattern

Abstract

Due to high density of population the per capita availability of land in India is comparatively less than the rest of the world. As a result, issues concerning the effective and efficient use of scarce land resources are becoming increasingly important in the Indian context. Importance of agriculture in the economy has been declining in terms of the sector’s share in GDP. On the other hand, the importance of the service sector is rapidly growing. Urbanisation has also increased significantly. Given these trends, it is quite possible that the land-use pattern in India has also been changing over the years in response to the structural changes that its economy has been going through. With this possibility in mind, the paper aims to examine whether changes in sectoral composition of the economy are reflected in the country’s land use pattern also. Further, it explores if changes in the sectoral land shares have any correspondence with comparative sectoral land productivity trends. Data on Gross Value Added (GVA) and Land -Use Pattern, accessed from relevant websites of the Government of India have first been processed by computing ratios and percentage, and drawing trend lines. Further, econometric methods have been used to estimate annual compound growth rates. Results show that agriculture has been able to sustain overall growth, including an increase in food-grain production, despite stagnations in its land share. Non-agricultural sectors have been able to claim increasing shares of land from the reduction of barren, unculturable, and cultivable wastelands. But the important point to note here is that the land-share of non-agriculture has been increasing not at the expense of agriculture but from progressively bringing to use lands which were previously not under any economic use. This is a positive development in economic use of the country’s limited land resource.