Moreover, such a policy would impose higher living costs on non-self-supply farmers who had to buy foodgrains. While pursuing economic growth without any political reform related to agricultural production, such as land reform, India was confronted with not only the limited procurement of development funds, but also difficulties in trying to adjust different interests caused by the gaps between or within regions arising from the Green Revolution. These problems, combined with other political issues, became de-stabilizing factors in the Indian economy.
The increase in foodgrain production, that began in the mid 1960s due to the Green Revolution, eventually pulled the Indian economy out of the structure of dependence on foodgrain imports. Nonetheless, given that we can see no changes in the per-capita daily foodgrain consumption, the increased output of foodgrains only replaced imports, without bringing any fundamental change in the domestic supply and demand for foodgrains. Since the new agricultural method relied on chemical fertilizers, the proportion of agricultural-related imports including chemical fertilizers against the total imports had been relatively high until the fiscal 1977, and this crowded out imports of capital goods and technologies necessary to promote industrialization.
This can be confirmed, for example, by the fact that the US dollar based index of machinery imports dropped after the Revolution, and was unable to revive for some time (Figure 1-5). Thus, from the agricultural crisis till the late 1970s, the Indian economy experienced the so-called "Lost ten years" of stagnation, caught in the "external trap"3. The ratio of imports of agricultural resources to total imports started to decline, thanks to the Green Revolution, in the latter half 1970s. At the same time, the Indian economy finally got out of the external trap, and started to prepare conditions for the free economy to commence in the 1980s4.
