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Role of Agriculture in Indian Economy

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Role of Agriculture in Indian Economy: Agriculture is the foundation of the Indian economy. The population of India mostly depends on agriculture for their livelihood and agriculture contributes to 40 percent of the total GDP of the country. While agriculture is one of the most important sectors, it has taken a comparative backseat and the service sector is leading the way.

Role of Agriculture

Role of Agriculture in Indian Economy

Agricultural Sector in the Indian Economy

Indian economy is mostly agricultural based economy and highly dependent on agriculture for production, distribution, and also consumption. Indian production per farmer is far less than actually needed. However, despite all the limitations agricultural sector is one of the most crucial sectors of the Indian Economy.

Importance of Agriculture in the Indian Economy

Almost more than half of the population residing in India depends on agriculture which holds a very crucial place in the economy:

  1. Employment opportunities are provided by agriculture as well as non-agricultural activities.
  2. Agriculture plays a very crucial role in international trade as well as import and export.

Role of Agriculture in the Indian Economy

Agriculture is key in all economies no matter what their degree of advancement. It meets a portion of the basic human needs by giving food and non-food needs. It gives;

  • Food things like Rice, Wheat, Coarse Grains, and Pulses,
  • Business crops like Oilseeds, Cotton, and Sugarcane,
  • Establishing crops like Tea and Coffee, and
  • Plant crops like organic products, vegetables, blossoms, flavors, cashews, and coconut. Moreover, some related exercises like milk and dairy items, poultry items, and fisheries are remembered for the agricultural area. A large portion of the created and industrialized nations got the underlying impulse for industrial advancement from farming.

Contribution to GDP

The agricultural sector plays a pivotal role in the contribution to the GDP of the country since independence. About 59 percent of the country’s total GDP was provided by the agricultural sector between 1950-1951.

Largest Employee Sector

More than half of the total population of the country is hired by the agricultural sector. About 55 percent of the total population of India is engaged in the agricultural sector.

Source of Food

India is referred to as the second most populous country in the world and feeds a huge part of the population. There is an urgent need to increase the dependency on other sectors of the economy as compared to the agricultural sector.

Relationship between Agriculture and Industrial Sector

There is a constant need for raw materials and most of the industries of the country collect their sources of raw materials from the agricultural sector. Half of the income which is generated in India in the industrial sector comes from agricultural-based industries and hence agriculture in India plays a very important role.

Commercial Significance

Agriculture in India is important for the development of the industrial sector and for trading purposes. Agricultural products like tea, coffee, etc. are some of the most edible, and textiles of India contribute to many parts of the total export from the country.

Source of Government Revenue

Agribusiness is a significant wellspring of income for the Central and State Governments of the country. The government is getting a ton of income from the expansion in land income. A few different areas like railways and streets are additionally acquiring a decent piece of their pay from the development of agricultural goods.

Role of Agribusiness in Monetary Preparation 

The arranging potential in India additionally relies upon the horticultural area. A decent gathering generally stimulates the nation’s arranged monetary development by establishing a superior business climate for transportation systems, producing enterprises, homegrown exchange, etc. A decent gathering additionally gives the government huge amounts of cash to cover its arranged costs.

Food Security for Developing Countries

Farming is the main significant wellspring of food supply as it is giving customary food to such a large population of our country. It is assessed that around 60% of homegrown utilization comes from agricultural items. Because of high populace pressure, work overflow economies like India, and rapid increase in food interest, food creation is expanding quickly. The ongoing degree of food utilization in these nations is extremely low and a slight expansion in personal income prompts a fast expansion in food interest (as such one might say that the interest in food in emerging nations There is a ton of adaptability. In this way, except if farming can enhance the surplus of groceries on the lookout, an emergency will undoubtedly emerge. Many non-industrial nations are going through this stage and farming has been created to meet the developing food needs. 

Role of Agriculture in Economic Planning

The possibility of arranging in India additionally relies much upon the rural areas. A decent yield generally gives a driving force towards an arranged financial improvement of the nation by establishing a superior business environment for the vehicle framework, producing ventures, inside the exchange, and so on.

A decent harvest additionally carries a lot of money to the Government for meeting its arranged consumption. Likewise, an awful harvest leads to an all-out melancholy in the business of the country, which at last leads to a disappointment in monetary preparation. Consequently, the rural area is assuming a vital part in a nation like India the flourishing of the Indian economy still to a great extent relies upon the farming areas. Along these lines from the prior investigation, it is seen that farming advancement is the fundamental precondition of sectoral expansion and improvement of the economy.


Indian economy is predominantly dependent on the agricultural sector and the agricultural sector supports the industrial as well as international trade in both imports and exports. Even though the contribution of agriculture is reducing gradually, it is still the most important sector on which most of the working population depends on.

Related Links

  1. Types of agriculture in India
  2. Agriculture of the world
  3. Agriculture and Food Security
  4. Types of Farming in India

FAQs on the Role of Agriculture in the Indian Economy

What role does agriculture play in economy?

The agriculture provides employment opportunities to the rural agriculture as well as non- agricultural labourers.

Why is agricultural economics important?

Agricultural economics are important as they play important role in the economics of development, for a process of continuous production and agricultural surplus.

Why is agriculture backbone of Indian economy?

Agriculture is referred to as backbone of Indian economy as 70 percent of Indian population for engagement in agriculture and also for raw materials for the industrial base and sectors.

What is the full meaning of agriculture?

The full meaning of agriculture is the art and science of cultivation of soil, growing crops, and also for raising livestock.

How much is agriculture important?

Agriculture is important for supporting livelihoods through food, habitat and jobs and also for providing raw materials for food and other products.

Last Updated : 21 Jan, 2024
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