What is the Important Role of agriculture in the Indian economy?

• It is also essential for food security, nutritional security, and poverty reduction in our country.

• GDP helps improve India’s foreign currency reserves through the export of agricultural products like tea, sugar, rice, etc.

• However, it is the largest unorganized sector in India.

• The share of agriculture in GDP is 16.5% in 2019-20 as per the estimates.

• However, In 2008 World Development Report (by World Bank) mentioned that GDP originating from agriculture is 4 times more effective than the GDP originating from other sectors.

• Around 50% of the population is engaged in the Agriculture sector, thus it promotes ‘Growth with Jobs’.

• More than 80% of farmers are still small and marginal farmers thus, farm mechanization is very low in India as compared to other

• Foodgrains production has increased over the period. It was 198) million tons in 1996-99. But it f has increased to (269 million tons in 2015-18 (36% increase).

• In 2018-19, it was 285 million tonnes.

Over the period, per capita net availability of total foodgrains and pulses has increased while it has declined for rice and wheat.

This is a good trend as it shows increasing diversity in the consumption of Indian households.

Per capita availability of pulses (an important source of protein) is around 55 g/day. This is higher than the threshold of 40 g/day as recommended by ICMR.

• Agriculture provides employment to about more than 50% of the working population in 2016-17.

• At the time of independence, agriculture provides employment to about 72% of the working population.

• The agriculture sector of our economy is a source of livelihood for a large section of our population.

• In a developing economy like India aggregated food demand increase not only because of population growth but also because of rising per capita income

• The annual rate of increase in the demand for food can be expressed as per the following formula

D=P+(yed)*Y*D= rate of growth of food demand

P= rate of growth of population

Yed = high-income elasticity of demand for food

Y = growth rate of per capita income

• It has been estimated that the income elasticity for food in India is about 0.6 or more while in developed countries it is between 0.2 to 0.3. Besides the huge increase in population the per capita food availability per day in India had increased Significantly

• Agriculture also provides raw materials to many of our large-scale industries like cotton textile, jute, Sugar, vanaspati, plantation, etc. These Industries depend on agriculture for the supply of their raw materials.

• Besides there are many Other industries that depend on agriculture in an indirect manner like Handloom weaving, oil crushing, rice husking, etc.

• likewise the n entire range of food processing industries depends on agriculture. Thus the growth and development of these Industries are linked up with the development and progress of the agricultural sector.

• The role of agriculture is quite significant both in the internal and international trade of the country it has been associated that food grain trade along with trading in other Agricultural Products constitutes about 20% of our total internal.

• A large number of people are engaged in different capacities in different agricultural trading operations and particularly in the busy season the agricultural markets are found to be buzzing with activities and caring on transactions running into crores of Rupees.

• Export of agriculture and allied product have been quite large in recent years and account for about 15% of our total export earnings.

• Similarly in sports of Agricultural Products to our quite significant in our foreign tree this account for about 10% of our total imports.

• Agricultural Development gives a big push to the development of other sectors of the economy like transport, communication, irrigation & power construction industry, fertilizers, pesticides, farm equipment and etc. Also, receive a boost as a result of agricultural development.

• Thus, agriculture help in the development of other sectors of the economy and in turn is helped by the development of this sector.

• The prosperity or adversity of agriculture affects the budgetary position of both the central and the state governments for example in a year of good harvest there is an increase in the purchasing power of the rural population leading to an increase in the demand for various types of consumer goods including durable goods.

• This not only gives a boost to these Industries resulting in increased employment and income but also increases the revenue from Central Excise and other taxes likewise the state government also gets more income from the revenue Agriculture Income Tax, sales tax, etc.

Madhya Pradesh has the highest share in pulses production (27%) but ranked 15th in pulses yield.

Among the production of coarse cereals, maize production has increased substantially and constituted 60% of the total coarse cereals.

Maize is followed by Bajra (21.1%), Jowar (10.6%), Ragi (4.1%), and Barley (3.9%).

• General Factor
  • High pressure of population on land
  • Mainland Increase
  • Inadequate nonfarm services
• Institutional factor
  • Size of hoarding
  • Land tenure System
• Technological factor
  • Old and traditional technology
  • No focus on new technology
  • Inadequate irrigation Facilities
  • Lack Fertilizer 
  • Inadequate Credit facilities
  • Agriculture Services
  • No Exclusion in taxes and other 
  • No agriculture marketing

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