The Role of Agriculture in Developing Indian Economy


The agricultural sector plays a crucial role in developing the Indian economy. Not only does it contribute to the country's GDP, but it also generates a significant number of jobs. Additionally, India has become a global outsourcing hub for agricultural inputs. However, the role of agriculture in the Indian economy is not always obvious.

Agriculture is the backbone of the Indian economy

India's agriculture is the backbone of the country's economy. It provides raw materials to industries, such as cotton, sugarcane, and jute. Other industries, like oil and gas, also rely on agricultural products for raw materials. In addition to providing raw materials, agriculture also generates significant government revenue. For example, a large portion of India's railway revenue comes from transportation of agricultural goods.

It contributes to the country's GDP

The Agriculture sector contributes to the GDP of a country in various ways. Its production stimulates the economy and has backward linkages with other sectors like the petroleum, chemical and machinery industries. Many of these industries depend largely on sales from farmers to make their products. Natural calamities, however, can affect agricultural sector production.

It is a major source of employment

Agriculture sector in India provides employment to a large number of people and is one of the main sources of GDP. However, the proportion of agriculture to the overall GDP has decreased over the past 50 years. Nevertheless, the country has made considerable strides in agricultural production over the last few decades, with the introduction of high-yielding seed varieties, fertilisers, and better water management systems. It is hoped that these developments will help farmers increase their production and incomes in the future.

It is a global outsourcing hub for agricultural inputs

India is a global outsourcing hub for agricultural input services, biotechnology and information and communication technologies (ICT). With its vast agricultural land, India is a significant source of raw materials, including cotton, jute textiles, sugar, vegetables, fruit and animal feed. Agriculture is also a major source of revenue for the country. Increased land revenue, increased per capita income and an increasing demand for quality food items are driving demand for agricultural inputs. In addition, transportation of agricultural goods is a key source of revenue for the government.

It is a source of livelihoods for a vast majority of people

India's agriculture sector supports a vast majority of the population, providing a source of livelihood to over a billion people. It is the world's largest producer of pulses, wheat, and cotton, and has the largest herd of cattle. The country has a staggering 195 million ha under cultivation. About 63 percent of this land is rainfed, while 37 percent is irrigated. An estimated 65 million ha is covered by forest, which provides a rich environment for farming.

It is a major source of revenue for the government

The government of India receives revenues from the agricultural sector, which is responsible for a large percentage of its GDP. Agriculture is also the main source of income for rural households in India. The livestock sector contributes more than one-third of the agricultural GDP and provides a livelihood to 70 percent of the country's rural households. Over the past few years, milk production in India has increased by about 4% per year, and future domestic demand for milk is expected to grow at a rate of five percent per year. While there are several challenges facing the dairy sector in India, there are also targeted programs which could boost production.

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