Role Of Agriculture In Indian Economy

Introduction To Agriculture
Agriculture is the cultivation of land and breeding of
 animals and plants to provide food, fiber, medical plants and other products to sustain and
enhance life.

The major agricultural products can be broadly grouped into foods, fibers, fuels, and raw materials 
(such as rubber). Classes of foods include cereals (grains), vegetables, fruits, oils, meat, milk, fungi and eggs.

Over one-third of the world's workers are employed in agriculture, second only to the service sector
 Types Of Agriculture

Agriculture is one of the most widespread activities in the world, but it is not uniform throughout.
There are a number of ways to classify agriculture, and some of the major criteria which can be adopted include:

• Scale
• Type of crop
• Livestock combinations
• Intensity
• Means of distribution of farm produce
• Level of mechanization

The following are the major types of agriculture around the world.
Types of Agriculture

• Nomadic Herding

• Livestock Ranching

• Commercial Plantations

• Dairy Farming
 Nomadic Herding
Nomadic herding is based upon the rearing of animals on natural pastures.
This practice is performed by the people of semi-arid and arid regions.
These people stay on the move with their animals in search of natural pastures for their livestock to graze
 Livestock Ranching
Under this system of farming, the major emphasis is laid on rearing animals.
Unlike nomadic herding, the farmers live a settled life.
This type of farming has developed on a commercial basis in areas of the world where large plots of
land are available for animal grazing
 Commercial Plantations
Although practiced over a rather small area, this type of farming is quite important in terms of its
commercial value.
The major products of this type of farming are tropical crops such as tea, coffee, rubber and palm oil.
This is a highly capital-intensive type of farming and most of the crops are tree crops.
 Dairy Farming
Dairy farming in India is a very much profitable business.
It provides an excellent opportunity for self employment of unemployed youth.
It is also an important source of income generation to small/marginal farmers and agricultural laborers.
 Main Features of Indian Agriculture

1. Source of livelihood:
Agriculture is the main occupation. It provides employment to nearly 52 % of total population.
It contributes 18% to national income.

2. Dependence on monsoon:
Agriculture in India mainly depends on monsoon. If monsoon is good, the production will be more and if monsoon is
less than average then the crops fail. Sometimes floods play havoc with our crops. As irrigation facilities are quite
inadequate, the agriculture depends on monsoon

3. Importance of Animals:
 In India, animals play an important role in agricultural activities such as irrigation,
ploughing, threshing and transportation of agricultural products. The full-fledged mechanisation of agriculture in
India is a distant dream and active participation of animals in agricultural activities will continue in future.

Source : http://www.economicsdiscussion.net/articles/main-features-of-indian-agriculture-explained
 4. Traditional methods of production:

In India methods of production of agriculture along with equipment are traditional. It is due is poverty and
illiteracy of people. Traditional technology is the main cause of low production.

5. Variety of Crops:

 There is diversity in climate, topography and soil in India, hence, a wide range of crops are
grown in the country. India experiences both tropical and temperate climate and therefore support the
cultivation of crops suitable for both these climates.

India is the world’s second largest producer of the agricultural products such as wheat, rice, sugarcane, several dry
fruits and largest producer of many fresh fruits like papaya, banana, mango, guava and vegetables

Source: https://www.india.gov.in/topics/agriculture
 Largest Agricultural Producing States of India

1. Rice ,Vegetables & Jute – West Bengal

2.Wheat & Sugarcane – Uttar Pradesh

3. Cotton – Gujarat

4. Tea – Assam
5. Coffee – Karnataka

6. Pulses – Madhya Pradesh

7. Rubber – Kerala

Source: http://www.walkthroughindia.com/offbeat/largest-agricultural-producing-states-of-india/
 Role of Agriculture in Indian Economy

1. Contribution to National Income:

From the very beginning, agriculture is contributing a major portion to our national income.
In 1950-51, agriculture and allied activities contributed about 59 per cent of the total national income.
Although the share of agriculture has been declining gradually with the growth of other sectors but the share still
remained very high as compared to that of the developed countries of the world.

For example, the share of agriculture has declined to

54 per cent in 1960-61
48 per cent in 1970-71
40 per cent in 1980-81
and then to 22 per cent in 2008-09
The Economic Survey 2017-18, which was released in Parliament on ahead of the Union Budget 2018,
had key implications for agriculture sector, a space which employs more than 50 per cent of the total workforce in
India and contributes around 17-18 percent to the country’s GDP. 

Source: https://www.financialexpress.com/budget/india-economic-survey-2018-for-farmers-agriculture-gdp-msp/1034266/
2. Source Of Livelihood

In India over two-thirds of our working population are engaged directly on agriculture and also similarly
depend for their livelihood. According to an estimate, about 66 per cent of our working population is engaged
in agriculture at present in comparison to that of 2 to 3 per cent in U.K. and U.S.A., 6 per cent in France and
7 per cent in Australia.

3. Source of Food Supply:

Agriculture is the only major source of food supply as it is providing regular supply of food to such a huge size of
population of our country. It has been estimated that about 60 per cent of household consumption is met by
agricultural products.

4. Role of Agriculture for Industrial Development:

Agriculture in India has been the major source of supply of raw materials to various important industries of our
country. Cotton and jute textiles, sugar, Vanaspati, edible oil plantation industries (viz. tea, coffee, rubber) and
agro-based cottage industries are also regularly collecting their raw materials directly from agriculture.
About 50 per cent of income generated in the manufacturing sector comes from all these agro-based industries in
India. Moreover, agriculture can provide a market for industrial products as increase in the level of agricultural
income may lead to expansion of market for industrial products.
5. Source of Government Revenue

Agriculture is one of the major sources of revenue to both the Central and State Governments of the country.
The Government is getting a substantial income from rising land revenue. Some other sectors like railway,
roadways are also deriving a good part of their income from the movement of agricultural goods.

6. Role of Agriculture in Economic Planning:

The prospect of planning in India also depends much on agricultural sector. A good crop always provides impetus
towards a planned economic development of the country by creating a better business climate for the
transport system, manufacturing industries, internal trade etc.

A good crop also brings a good amount of finance to the Government for meeting its planned expenditure.
Thus from the foregoing analysis it is observed that agricultural development is the basic precondition of
sectoral diversification and development of the economy.
Schemes introduced by the government to make
agriculture a profitable sector

1. Launch of Pradhan Mantri Fasal Bima Yojana

• The Pradhan Mantri Fasal Bima Yojna was

launched on 18th February 2016 by
Prime Minister Shri Narendra Modi.

• PMFBY provides a comprehensive insurance

cover against failure of the crop thus helping
in stabilising the income of the farmers. 

• The scheme is being administered by

Ministry of Agriculture.
2. Mera Gaon, Mera Gaurav

• This scheme is being launched involving

agricultural experts of agricultural
universities and ICAR institutes for
effective and deeper reach of
scientific farming to the villages.

• A group of experts will be associated

with one particular village to create
awareness and adoption of new
technologies including farm investment,
loans, availability of inputs and marketing.
3. Pradhan Mantri Krishi Sinchai Yojana

Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)

has been formulated with the vision of
extending the coverage of irrigation ‘Har Khet ko pani’

The Cabinet Committee on Economic Affairs chaired

by Hon’ble Prime Minister has accorded approval
of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
in its meeting held on 1st July, 2015.
 Role Of NABARD In Agricultural
Development
National Bank for Agriculture and Rural Development(NABARD) was set up in 1982

The role of NABARD in ensuring credit flow for promotion and development of agriculture, rural infrastructure,
small scale industries, cottage and village industries and handicrafts is well established.

Types Of Credit Cards Issued by NABARD

1. Kisan Credit Card

Kisan credit card scheme aims at provision of adequate and timely support from the banking system to the
farmers for their cultivation needs including purchase of inputs in a flexible and cost effective manner.

2. Swarojgar Credit Card:

Farm sector activities like fisheries, dairy etc. are covered under the scheme. Generally such of the
self-employment activities which have regular turn over/income stream on short interval basis can be covered under SCC scheme.

3. Rasthriya Krishi Bima Yojana (RKBY):

 To provide insurance coverage and financial support to the farmers in the event of failure of crops as a result of
natural calamities, pests and diseases. To help stabilize farm incomes, particularly in disaster years
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