Role of Agriculture in Indian Economy

Agriculture is an important sector of Indian economy as it contributes

about 17% to the total GDP and provides employment to over 60% of
the population.
 Contribution to National Income:
From the very beginning, agriculture is contributing a major portion to
our national income. It contributes 15.87% of national income in 2018-
2019, whereas in 1950-51, it was 59%.
 Source of Employment:
In India, agriculture is the main soured of employment. In 2018-19, more than
55.78% of the total labour force of India is engaged in agriculture. However, other
sectors of the economy could not generate enough employment for the growing
population.
 Provision for Food Grains:
Agriculture in India has played an important role in meeting the food needs of the
people. Production of the food grains is continuously increasing in India. In 2018-
19, there was 283.37 million tonnes of food grains produced in India.
Supply of Raw Material to Industrial Sector:
Many industries like cotton industry, sugar industry, etc. depends on agriculture of
their raw material requirement so, we can say that industrial sector is depended on
agriculture sector. As the workers engage in industrial sector depend on agriculture
for their food needs. Around 50% of the income generated in manufacturing sector
comes from all these Agro-based industries.
 Commercial Importance:
Indian Agriculture is playing a very important role both in the internal and external trade of the
country. Agricultural products like tea, coffee, sugar, tobacco, spices, cashew-nuts etc. are the main
items of our exports and constitute about 50 per cent of our total exports. Besides manufactured
jute, cotton textiles and sugar also contribute another 20 per cent of the total exports of the
country. Thus nearly 70 per cent of India’s exports are originated from agricultural sector.
Source for 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.
Agriculture’s share in GDP:
It is estimated that India’s agriculture sector accounts only for around 14 percent of the
country’s economy but for 42 percent of total employment. As around 55 percent of India’s
arable land depends on precipitation, the amount of rainfall during the monsoon season is
very important for economic activity.