Role Of Agriculture In Indian Economy

Role of agriculture in India economy: Agriculture is the backbone of the Indian economy. Where on one side it is the main employment provider area. At the same time, it has an important contribution in gross domestic product (GDP). About 60 percent of the country’s population depends on agriculture for their livelihood. Participation in agriculture gross domestic product is about 22 percent.

In fact, in these developed countries, in the developing nations, which is the percentage of agriculture participation in the gross domestic product, there is relatively less population involved in agriculture. For example, agricultural participation in national income of Britain and America is 2 and 3 percent, respectively.

Food is available only through agriculture, as well as raw materials for many major industries (cotton textiles, jute industries, sugar industry, tea industry, cigarette industry and tobacco industry, etc.). Agriculture is a major source of national income. Agrarian products are an integral and prominent part of business (national and international).

India is a world trade of tea, cotton, oilseeds, masala, tobacco etc. Taxation of agricultural products from internal trade and taxation from international trade increases, which is absolutely essential for the strengthening of the economy.

Agriculture affects the entire nation. Agricultural production keeps inflation under control, provides power of industries, increases agricultural income and provides jobs. Agriculture has economic importance as well as social importance.

This area can play an important role in eradicating poverty because most poor people are employed in this area and if agriculture is to be developed then poverty will also end automatically.

Today, India is self-sufficient in foodgrains, although the pressure to meet the food needs of the growing population is also increasingly growing on India. On the international front, for the Indian agriculture in the world, will have implications in the future. How India will deal with these challenges, it remains to be seen.

The place of agriculture is very important in India’s economy. The percentage of agricultural produce produced in the country’s total export business is quite high. Almost all the supply of essential foodgrains in India is done through agriculture.

At present, a very large population is getting employment through agriculture. It becomes very important in this, whereas the problem of unemployment in the country is increasing day by day. Indian agriculture has been considered as ‘the backbone of the country’, because this is the solution that is extremely essential for the well-being of the country.

Importance of Agriculture in India

We all know, India is an agriculture based country, more than 60% population in India is dependent on agriculture because agriculture is the primary source of livelihood and income in rural areas. We all know that India is called ruler’s country. Agriculture is the backbone of India.

Agriculture in inda contributes in the initial two decades towards the total National output between 52% and 60%. The aggregate share of agriculture and its allied sectors such as agri-business, animal husbandry, fisheries, ranger service as far as rate of Gross Domestic Product (GDP) is 13.9% during 2013-2014.

Role of Agriculture in Indian Economy

Indian agriculture comes 5th in exports constitute of the total export of the country. We can say that agriculture is the most important sector of India.

Agriculture sector in India accounts of 18% of India’s Gross Domestic Product (GDP) and it provide employment to more than half population of the country directly or indirectly. More than 50 % of population in India directly and indirectly depended on the agriculture.

Some are directly attached with farming and some are involved in doing business with the agriculture products.

India has that capacity to produce the food grain that can make the big change in the Indian economy.

Role of agriculture in indian economy

There are mainly 11 role of agriculture in Indian economy :-

1. Contribution to National Income

From the last many years, agriculture is contributing a major part of national income in India. It contributed during the first two decades towards the Gross Domestic Product (GDP) between 52% and 60%.

Agriculture is the primary source of income for most of the developing countries. In India more than 50% national income comes from the agriculture sector.

2. Supply of Raw Material to Agro-based Industries

Agriculture supplies the raw material like jute, sugar, cotton etc to various agro based industries. All these food processing industries are dependent on agriculture.

Industries get raw material from agriculture like textiles industry get cotton from the agriculture so that they are able to produce clothes and when they produces clothes from the cotton, they also need some people in their industry so that they also create employment through the agriculture.

3. Foreign Exchange

Indian agriculture producing many types of agricultural products which others countries are not able to produce in sufficient amount and they need in like jute, tabbaco, cotton, tea, coffee etc and India exports these products to other country and earn foreign exchange.

The Nations exporting trades are mainly dependent on agricultural sector. Such agricultural products in India accounts about 18% of the entire value of exports.

This demonstrates that the agricultural products is important source for earning foreign exchange.

4. Employment Opportunities

One of the most importance of Agriculture in India is that, Agriculture sector is providing high employment opportunities to the unemployed people and labour force that reduce the high rate of unemployment in the country.

Peoples are attached to the agriculture sector and earning income, some peoples are directly attached to the agriculture like farmers, labours.

They are directly attached to the field and they are producing agricultural products after they are earning income and some others are indirectly attached to the agriculture like agri business. They are doing business of agricultural products and they are earning income.

There are many types of agro based industries which are creating employment opportunities. Constructions of irrigation scheme, drainage system as well as some other activities in the agricultural sectors provides large employment opportunities.

5. Marketable Surplus

Agriculture sectors contribute the marketable surplus. Country is developing from the various activities like many peoples doing work in mining, manufacturing and other agriculture sectors.

All these activities rely on food production they might meet from the country’s marketable surplus.

6. Economic Development

Agriculture contributes in the economic development. The national income levels as well as the people’s living standard in country have been improved.

Today’s the Indian agriculture developing at fast rate of progressive outlook as well as increased motivation for the improvement and development. Hence, agriculture play an important role to create good atmosphere for economic development of the country.

7. Provision for Food for the Population

Agriculture makes provision for food to every increasing population in India. It is just because of excessive pressure of population labour surplus economics like India rapid increase in the demand for food.

Food production increased at fast rate. The current level of food consumption in India is moderate with a little increase in the capital income.

8. Significance to the International Trade

Agricultural products like tea, coffee, cotton, spices, tobacco etc. are the major product for exporting that rely on agriculture. These exports of products helps to reduce countries balance of payments as well as earning foreign exchange.

This exchange may be used to import other essential inputs like machinery, raw material etc. that is very helpful for the country’s economic development.

9. Food Security in India

Agriculture is the sector which ensure a country of food security because the main requirement of any country or people is Food and Agriculture secure the food for the population.

Food security prevents malnourishment that has been believed from long time to be one of the major problems faced by developing countries.

10. Sources of Livelihood

In India, there are maximum number of population are working in agriculture and realted sector. About 60% of the total Indian population engaged directly on agriculture and because of this, they also depend for their livelihood.

Thus we can say that agriculture is the main source of livelihood in India and play a very important role in our life.

11. Sources of Government Revenue

Important facts on role of agriculture in Indian economy

How important is the importance of agriculture for the advancement of the country and its overall development, can be confirmed with the following facts:

Main role of agriculture in Indian economy is that, Agriculture industry provides employment to most of the people of India. 52 percent of the country’s population is directly dependent on agriculture. Millions of people get employment by using agricultural products as raw materials in many industries.

In addition, there is huge revenue for transport companies to carry agricultural items such as food grains, cotton, jute, sugarcane, oilseeds etc. from one place to another. Thus, Indian agriculture is the most important means of life-sustaining for the residents of the country.

About 100% of India’s food requirement is supplied only by Indian agriculture. In addition, industries like sugar, textiles, jute, oil etc. often depend entirely on Indian agriculture. Because the raw materials required by them are mainly done by domestic production. There is a shortage of long fiber cotton and jute, which is obtained from abroad.

One of the world’s largest agricultural economies contributed to the agriculture sector in India, in the year 2008-2009, it was 15.7 percent of gross domestic product (at constant prices of 2004-2005), while in 2004-2005 it was 18.9 percent.

Indian agriculture is dependent on monsoon. That is why Indian agriculture has been called ‘gambling of monsoon’. If the monsoon comes in time and in sufficient quantity, then the agro ecology is also cured, thereby fulfilling the requirement of food grains in the country and the deserving raw material is also received for the enterprises. In such a situation, the government can fix its tax system accordingly.

Percentage of agricultural commodities in India’s total export business remains substantial. In the year 1960-1961, a total export of 642 crores was exported, out of which the export of industries based on agriculture and agricultural raw materials was 284 crores. Export of agricultural and allied products increased to Rs 77.783 crore in the year 2008-2009, which is 9.1 percent of the country’s total exports.

The reason for the importance of agriculture in India is that it provides raw material to many major industries. Cotton textiles, jute, sugar, vegetable etc. industry is dependent on agriculture.


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