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A
griculture remains the most important sector of the Indian economy, whether it be the pre-independence or the post-independence periods.
This fact is emphatically proved by the large number of people who depend on it for their livelihood. Before starting any discussion on Indian agriculture,
we must look into its special features:
(i) From the monetary point of view the share of the agriculture sector in the economy remains at 17.5 per cent of the GDP.1 In the fiscal 1950–51 agriculture accounted for 55.4 per cent of the GDP.
(ii) The share of agriculture has been falling in the country’s gross income, while industrial and services sectors’ shares have been on a rise constantly. But from the livelihood point of view still 49 per cent of the people of India depend on the agriculture2 sector. This makes it a more important sector than the industry and the services (for Nepal and Tanzania the dependency for livelihood on agriculture is still higher at 93 per cent and 81 per cent, respectively). It means that 49 per cent of the population lives with only 17.5 per cent of the total income of the Indian economy—this fact clearly substantiates the reason why the people who depend on agriculture are poor. In the developed economies such as the USA, France, Norway, the UK and Japan, agriculture contributes only 2 per cent of their GDP with only 2 per cent of the people dependent on this sector for their livelihood.
(iii) Agriculture is not only the biggest sector of the economy, but also the biggest private sector too. It is the only profession which still carries no burden of individual income tax.
(iv) This is the biggest unorganised sector of the economy accounting for more than 90 per cent share in the total unorganised labour-force (93.4 per cent of the total labour force of the economy, i.e., 39.8 crores is employed in the unorganised sector).3
(v) India has emerged as a significant agri-exporter in few crops, namely— cotton, rice, meat, oil meals, spice, guar gum meal and sugar. As per4 the WTO’s Trade Statistics, the share of India’s agricultural exports and imports in the world trade in 2015 were 2.40 per cent and 1.40 per cent, respectively. Agricultural exports as a percentage of agricultural GDP increased from 7.95 per cent in 2009–10 to 12.3 per cent in 2015–16. During the same period, agricultural imports as a percentage of agricultural GDP also increased from 4.90 per cent to 5.9 per cent.
(vi) According to the export figures, agriculture is deeply related to
industrial growth and the national income in India—1 per cent increase in the agricultural growth leads to 0.5 per cent increase in industrial output (growth) and 0.7 per cent increase in the national income of India.5
(vii) The industrial sector was selected as the ‘prime moving force’ of the economy in the late 1940s. But due to market failure the sector failed to lead the economy after independence. Without increasing the income of the people who depend on agriculture for their livelihood, the market was not going to support the industries. As a result, the Government of India announced agriculture as the prime moving force of the economy only in 2002.6
(viii) With 1 per cent increase in the share of agricultue in India’s total exports, the money which flows into agriculture is calculated to be Rs. 8,500 crores.7
(ix) In 2016-17 foodgrains production is estimated to be a record 270.1 million tonnes of which is around 7 per cent higher than the total production of
(x) Productivity of major crops are lower in case of India in comparison to the world’s best practice. Though it has been improving with a slow pace, the productivity of rice, wheat and pulses improved from 2,202 kg, 2,802 kg and 625 kg per hectare of 2007–08 to 2,390 kg, 2,872 kg (falling from 3,026 kg of 2011-13) and 744 kg per hectare in 2014-15.9
(xi) A total of 66.1 per cent of the cropped area in the economy still depends on the uncertainties of monsoon for their irrigational requirements.10