Role of agriculture in Indian economy

Agriculture is the main sector of Indian economy which is amply powered by the following points:1. Share in National Income: The contribution from agriculture has been continuously falling from 55.1% in 195 -51 to !".#% in 19$1-$% & further to 1$.5% in % #- ". 'ut agriculture still continues to be the main sector because it pro(ides li(elihood to a ma)ority of the people. %. Largest Employment Providing Sector: in 1951* #9.5% of the wor+ing population was engaged in agriculture. This percentage fell to ##.9% in 1991 & to 5#."% in % 1. ,owe(er* with rapid increase in population the absolute number of people engaged in agriculture has become e-ceedingly large. !. Provision of Food Surplus to the Expanding Population: 'ecause of the hea(y pressure of population in labor-surplus economies li+e India & its rapid increase the demand for food increases at a fast rate. Therefore* unless agriculture is able to continuously increase its surplus of food-grains* a crisis is li+ely to emerge. .-perts foresee that by the end of 11 th fi(e year plan /i.e.* % 11% 1%0* the demand for food-grains is e-pected to increase to %$ .# million tons. 1eeting this demand would re2uire %% growth per annum. The challenge facing the country is clear as during the last 1 years the food-grains ha(e been growing at a meager .3$%. 3. Contribution to Capital formation: There is a general agreement on the importance of 4apital 5ormation in economic de(elopment. 6nless the rate of 4apital 5ormation increases to a sufficient high degree* economic de(elopment cannot be achie(ed. Agriculture can play a big role in pushing the 4apital 5ormation in India. 7ural sector can transfer labor & capital to the industrial sector which can be effecti(ely used to increase the producti(ity in the latter. 5. Providing a! "aterial to industries: Agriculture pro(ides raw materials to (arious industries of national importance. 8ugar industry* 9ute industry* 4otton te-tile industry* :anaspati industry are e-amples of some such industries which depend on agriculture for their de(elopment. #. "ar#et for Industrial Products: 8ince more than two-thirds of the population of India li(es in rural areas* increased rural purchasing power is a (aluable stimulus to industrial de(elopment.

". Importance in International $rade: Agriculture constitutes about "5% of the total e-ports of the country. 8uch is the importance of agriculture as far as earnings of foreign e-change are concerned.