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  • Agriculture sector has 60% + population dependence. This sector provides us with food security, raw material for the manufacturing sector.
  • India’s agriculture sector is characterized by traditional, subsistence and livelihood, rain fed farming, food grain oriented, lack in diversification and commercialization.
  • The key issues in agriculture are to improve productivity, and increase production.


Today, all available arable land is already under cultivation which means mass production can be increased only through increased productivity. As per Economic Survey, India has shown growth in productivity in few areas:

  • – Record food grains production of 264.4mt in 2013-14
  • – Record production of oilseeds of 32.4mt in 2013-14
  • – Record production of pulses of 19.6mt in 2013-14
  • – India ranks first in the world in productivity of grapes, banana, cassava, peas, and papaya.


The average annual growth of agricultural production right since Independence has been only 2.5%.

Growth in agricultural production is seen as multiplier for the rest of the economy as it helps in augmenting supply of food products thereby cooling prices.

Share in GDP and Employment:

  • The share of agriculture and allied sector in GDP declined to 15.2% during eleventh plan and further to 13.9 % in 2013-14.
  • Agriculture provided direct employment to 69% of Indian labour in 1950-51. While it still accounts for about 54.6% of total employment, there has been a decline in the absolute number of cultivators from 127.3 million to 118.7 million.
  • Decline in share of agriculture in GDP is an indicator of growing industrial and services sector and not a reflection of declining importance. Agriculture cannot sustain a high growth being dependent on monsoon and the increase cannot lift overall growth. BASIC FEATURES OF INDIAN AGRICULTURE
  • Industry and services have the ability to expand faster than agriculture resulting in a declining share of agriculture. It should not be seen as declining importance or affecting food security for India.

Share in International trade:

  • According to WTO International Trade Statistics, 2012, India’s share in global exports and imports of agricultural and food products was 2.07% and 1.24% respectively.
  • Bulk of agricultural exports today consists of commodities including guar gum meal, rice, tea, coffee, tobacco, cashew, spices, raw cotton and sugar.
  • Given sufficient stocks of food grains in the central pool, the government has allowed exports of 4.5 million tonnes of wheat from the central pool stock of the FCI through central public-sector undertakings and placed export of wheat and rice under open general license (OGL).
  • Almost 30% of tea is produced in the country and 50% of coffee produced is exported.
  • Manufactured goods using agricultural raw materials accounts for 15% of India’s exports.
  • India exports dairy products, fruits, vegetables, animal and vegetable oils and raw materials but their value in total imports is negligible.
  • Agriculture exports grew by 5.1% in the year 2013-14.

Contribution to food availability:

  • Food availability level of a country depends on the growth rate of food grain production and the population growth rate. BASIC FEATURES OF INDIAN AGRICULTURE
  • Production of food grains increased at an average annual rate of 2.5% compared to the average growth rate of population of 2.1%, thus making India almost self-sufficient in food grains in the last decade.

Growth Rates of Agricultural Production, Area and Yield:-

  • Rate of growth of agricultural production has not been uniform in post-Green Revolution phase. Growth rates reached its peak during 1980s with a tendency towards deceleration in the 1990s.
  • Growth in Agricultural production has been mainly due to higher yield or productivity and area under crops has increased only marginally. In fact, area under food grains has actually decreased in the overall period between 1970-71 to 1999-2000.
  • Yield per hectare of food grains has increased by more than three times from 552 kg per hectare in 1950-51 to 1,703 kg per hectare in 2004-05. Most significant increase has taken place for wheat (four times in the same period).
  • Yield of coarse cereals like jowar, bajra and maize has increased very slowly. Slowest increase in yield has been registered for Pulses with just 35% increase over 55 year period.
  • Indian Agriculture suffers from lower yield levels vis-à-vis major agricultural producers in the world; despite India being one of the largest producers of most of the major crops.
  • Despite having maximum area under Pulses and maximum output being produced, India ranks a distant 138th among all the nations in terms of pulses yield.
  • Such lower levels in terms of crop yields show that Indian Agriculture holds enormous potential to grow by adopting better agricultural technology.

Capital Formation in Agricultural Sector:

  • The Gross Capital Formation (GCF) in agriculture and allied sector in proportion of the GDP in the sector has shown a rise from 14% in 2006-07 to 19.8% in 2010-11 (at constant 2004-05 prices).
  • However, the GCF in the Agriculture and Allied sector as a proportion of total GDP has stagnated at around 2.5 to 3% since last seven years. BASIC FEATURES OF INDIAN AGRICULTURE


Indian Economy

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