Economic Activity of South Asia: Agriculture, Mineral and Energy Resources

Throughout history, agriculture has played a central role in the economies of South Asian countries. Over two-thirds of the population still depends on it for a liv­ing, and it accounts for nearly one-third of the region’s exports. Such major problems as food shortages, rural unemployment, and social, economic and political discon­tent are directly related to the agricultural systems.

In statistical terms, the region occupies a major position in the world in several ag­ricultural commodities, with India logically contributing a large share. India is a major producer of food grains in the world; third in wheat production, second in rice and millets; and first in the production of tea, jute (used as a fiber), pluses (beans, peas), and peanuts; and holds an important posi­tion in the production of such commercial crops as spices, bananas, tobacco, oil seeds, and cotton.

It also has the world’s largest cattle population. Pakistan is another im­portant producer of wheat, cotton, and millets. Bangladesh is significant for jute and rice; while Sri Lanka is a major pro­ducer of several commercial crops, notably tea, coconuts and rubber.

In 1966, first India and later Pakistan introduced the newly developed high- yielding varieties of wheat and rice. Dwarf strains of these crops were introduced in areas of favorable environment in parts of the northern plains of India and Pakistan. Initial results were truly dramatic, produc­tion registering growth rates of over 20 percent annually between 1966 and 1971.

These measures ushered in the so-called “Green Revolution.” By the early 1970s more than a third of the wheat planted and half the wheat harvested were from the new varieties. During the next decade three- fourths of the wheat and nearly half the rice produced in India were of high-yield­ing varieties, and nearly 80 percent of these were grown in Punjab, Haryana, and west Uttar Pradesh in the northern Indian plain and in the state of Tamil Nadu in south In­dia.

Grain crops almost always form the basis of national diets and they support a vast majority of the people. The favored grains have been rice and wheat, with sor­ghum, millets, barley and maize as secondary food crops. Rice is the leading crop in all countries except in Pakistan, where wheat enjoys by far the most com­manding position.

Although rice production there substantially increased during the 1980s, the Ganga delta and the coastal lowlands with high temperatures and ample rainfall 40 to 60 inches (1,000- 1,500 millimeters) during the growing season, and conditions of clayey loam soils form an ideal environment for rice growth. In areas where rainfall is less than 1,500 millimeters annually, rice is raised with the help of irrigation, as in parts of peninsular India, the middle Ganga plain and Pakistan (where it assumes a secon­dary position).

In the late 1960s, “the Green Revolu­tion” took hold in northwest India and the adjacent areas of Pakistan, as also in lesser measure in Sri Lanka. Under government patronage, the progressive farmers of this region took to newer, high-yielding varie­ties of grain crops introduced by the Green Revolution. As a result, production of these crops increased substantially.

Bangla­desh and Tamil Nadu State in India also benefited from these new strains of grain crops. Improvements in grain production and undoubtedly been also facilitated by the introduction of scientific farming prac­tices and land reforms that had become necessary with the adoption of these strains of crops. However, crop yields in South Asian nations still remain among the lowest in the world.

Sorghum and millets (Jowar, bajra, ragi), are coarser grains, and form the poor man’s diet; they are extensively grown in the drier parts of the subcontinent and in areas of poor soil. Among other staple crops pulses (peas and beans of various kinds) and peanuts are raised extensively everywhere and are the chief sources of protein. Most pulses are eaten as dal (puree form) complementing bread, rice or curry dishes in the cuisine of these nations.

Among the specialized cash crops, sug­arcane, peanuts, cotton, oil seeds, and jute are grown in India, Bangladesh and Paki­stan. Tea, coffee, and rubber are raised on plantations in India and Sri Lanka, and tea in Bangladesh. South Asian countries are the major exporters of several of these cash crops. In perspective, it may be pointed out that India has retained its age-old pre­eminence in the world in several crops. It is the world’s leading producer of tea, cane sugar, millets, peanuts, and jute and ranks second in cotton and tobacco.

Mineral and Energy Resources:

Among South Asian nations, only India’s mineral resources are of considerable im­portance by world standards. Ranking fairly high among the producers of iron ore, coal, mica, and manganese, it also has extensive reserves of chromite, bauxite, and limestone. A major deficiency is petro­leum, which must be imported in substantial quantity in view of rising de­mand, created in large measure by a recent increase in the production of chemical fer­tilizers.

Current production of oil is limited to small fields in Assam, and Gu­jarat and to a recently, discovered offshore fields named Bombay High, along the western coast, with seemingly sizable po­tential, is likely to ease the situation. Offshore exploration near both the Ganga and Indus deltas, among other areas is cur­rently being vigorously pursued. Nevertheless, India is far better endowed in minerals than most industrial countries of Europe, and has resources vastly supe­rior to those of Japan.

Elsewhere, there is general deficiency of mineral wealth, with the exception of some natural gas, petroleum, iron ore, and low-grade coal in Pakistan. The search for minerals in Sri Lanka and Bangladesh is understandably urgent; future economic development in South Asian nations will to some degree depend on the discovery and exploration of energy and mineral re­sources.

Within India, minerals are distributed in three well-defined areas:

(a) The north­eastern part of the Deccan Plateau, which is especially well-endowed with coal, iron ore, manganese, bauxite, and mica;

(b) The south Indian peninsular section, which is important for mica, chromite, and iron ore; and

(c) Eastern Rajasthan and northern Gujarat, which contains considerable amounts of bauxite, limestone and iron ore.

In general, energy resources (excepting coal and in some measure hydroelectric power in India) remain largely underdevel­oped in these nations. Potentially, several areas have good prospects for the develop­ment of hydroelectric power: the submontane Himalayan belt in India and Nepal; and the central mountainous region of Sri Lanka.

Development is hampered as much by lack of government priorities and funding, as by the fluctuating climate re­gimes, inaccessibility of physically suitable locations, and difficulties in construction. The generation of electricity from nuclear energy is still in its initial stages in India and Pakistan. The few existing plants serve the industrial centers of Mumbai, Chennai, and Bangalore in India.

Since the successful explosion of an atomic device in 1974, India has been working on the exten­sion of nuclear energy production for peaceful purposes. Nuclear technology is well advanced in Pakistan, as well, and quite likely it has already capabilities of building nuclear weapons. India’s reserves of radioactive thorium ore and monazite sands appear fairly extensive, but the limit­ing factor in power generation is the prohibitive costs involved in importing or developing a breeder reactor to provide fuel for the nuclear power plants.

Manufacturing:

Against the back­ground of underdeveloped mineral and energy resources manufacturing remained at a low level during the colonial era in the subcontinent. There were only two large modern plants, all in India, devoted entirely to the production of iron and steel items (nearly one million ton of crude steel and another million ton of pig iron). Industrialization in the post-independence period has expanded more rapidly in India and to a lesser extent in Pakistan than else­where.

India now claims a rank among the top ten industrial nations of the world in total industrial output, yet only a little over 10 percent of the 375 million persons in its labor force are employed in large scale manufacturing establishments, (em­ploying 50 or more persons and using mechanical power). Even lower percent­ages characterize the other nations of South Asia.

Over half of the persons en­gaged in processing or manufacturing activity are in the village-based “household industries,” the remainder are in urban- based but small-scale, non-factory handicraft industries, producing locally- used materials such as textiles and tools. These were encouraged and subsidized by local governments particularly in India in the first two decades after independence. The focus was then shifted to heavy indus­try within the framework of national planning.

Unlike India, heavy industry did not greatly expand in Pakistan or Bangladesh largely as a consequence of their limited resource base. In all of South Asia, however, cottage industries producing handicraft items like superb Kashmiri shawls, and woodwork, Rajasthani metal ware, Benares Saris, Dhaka Muslim cloth and Pakistani rugs, prized at home and abroad for their truly outstanding workmanship, continued to grow; but face an uncertain future as most small-scale enterprises will ultimately have to give way before the in­exorable trend toward more efficient, low-cost factory production.

In India and Pakistan small factories using machinery and modernized equip­ment are now widespread. Their growth occurred largely in the past two decades in the emerging industrial corridors along the major railroads; they now produce such durable items as electric fans, sewing ma­chines, bicycles and tools.

These modest operations continue to grow as electricity is introduced into new areas. In view of their employment potential and low capi­tal requirements, state governments have encouraged such growth by financial sup­port. As a result, small-scale production of soaps, paints, fans, smaller consumer goods, sewing machines, and so forth has substantially increased.

Expansion of heavy industry has been more rapid than for small-scale enterprises because of significant federal support. Air and rail transport, and certain types of manufacturing such as military hardware and nuclear energy equipment, are under direct government control. A large por­tion of the iron and steel, machinery, mining, and chemical industries are also in the public sector.

In South Asia, India is the most ad­vanced country in industry and manufacturing. The first steel mill was constructed at Jamshedpur in a mineral- rich area of Chota Nagpur early in the present century and went into operation in 1912. The nearby rich iron ore, lime- stone, and manganese, and the Damodar Valley coalfields serve the industry.

Gov­ernment has favored iron and steel investments and protects domestic produc­tion against foreign imports. The Soviet Union, United Kingdom, and West Ger­many and the United States have all assisted India in the development of its iron and steel industry.

Today there are 10 major iron and steel mills, 8 of them gov­ernment-owned and operated, with a total production capacity of over 12 million tons per year. The engineering, metallurgi­cal, chemical, and electronic-electrical industries have also expanded substantially in recent years. Cement and fertilizer pro­duction is being given special governmental support.

The stress on agri­cultural productivity has resulted in the construction of many fertilizer plants, though output lags behind the increased demand generated by the Green Revolu­tion. Production of automobiles, aircraft, and electrical goods (both in the private and public sectors) are protected by heavy tariffs and other types of government aid against foreign competition.

Increasingly, India is changing from a total importer to a competitive exporter. The range of her major industrial exports has been broaden­ing from such commodities as cotton cloth and bicycles to textile machinery, machine tools and locomotives.

India and Pakistan have developed tex­tile industry, which is widespread but especially concentrated in Mumbai and Ahmedabad in India, and Karachi in Paki­stan. Dhaka in Bangladesh is also an important center. The metropolitan region of Kolkata and several cities of Bangladesh are the centers of jute manufacturing. Woolens and silks are also produced on a large scale in both India and Pakistan.

In general, the manufactures of Pakistan, Bangladesh, and Sri Lanka are much less diversified than those of India. Production of cement, and fertilizers; and food and leather processing activities are steadily in­creasing in India and Pakistan. Jute products, rice milling, and petrochemicals, and a steel plant in Chittagong in Bangla­desh add somewhat to its otherwise small industrial base.

The traditional dependence of Sri Lanka on plantation crops (tea, rub­ber, coconuts) is now steadily being shifted to the manufacturing items based on these cash crops. Although the share of indus­trial items increased from one-sixth to one-fourth of her exports during the 1970s, manufacturing still remains at a low level in Sri Lanka.

During colonial rule Indian industry was highly localized in a few cities: the ma­jor ports of Bombay, Calcutta, and Madras (now Mumbai, Kolkata, and Chennai), and the inland cities of Ahmedabad, Bangalore, and Kanpur. The commercial legacy of over-concentration in a few commercial centers is now steadily changing with re­spect to light consumer-oriented industries.

New industrial corridors are emerging along the major railroad lines between the chief metropolitan areas linking the port cities with the inland agricultural hinter­lands. Primary plants for industrial goods and industrial raw materials are now widely dispersed. The South Asian govern­ments, in general, have pursued a policy of industrial decentralization, largely to pla­cate regional demands, but also to reduce congestion in the older industrial centers. This is particularly true in India, where steel mills are dispersed through several states: West Bengal, Bihar, Orissa, Madhya Pradesh, Andhra Pradesh, and Karnataka.

Although South Asia’s expanding in­dustrialization holds promise for considerably improved living standards at some future date, the present situation of the mass of factory workers is not a. happy one. A large proportion of these workers, especially in the larger cities, is composed of male immigrants from the countryside who have flocked to such in­dustries as cotton and jute milling, leaving their wives and children in the village and sending them regular remittances.

These factory workers often have to cope with the high cost of urban living, and lead lives of drudgery, deprivation, and loneliness, while their families in the countryside sub­sist in scarcely less depressing conditions on the meager sums sent by family mem­bers working in distant cities.