Importance of agricultural sector in GDP

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                         Importance of agricultural sector in the Indian Economy

Gross domestic product (GDP) is the standard measure of the value-added created through the production of goods and services in a country during a certain period. Agriculture contributes to 17% of India’s GDP.

  • Total geographical area- 328 million hectares

  • net area sown-142 million hectares

  • Gross cropped area-90.8 million hectares 

  • net irrigated area- 56.9 million hectares

  •  provides food to more than 1 billion people

  •  produces 51 major crops

  •  contributes to 1/6 of the export earning



Foreign Exchange

70% of India’s export are originated from the agriculture sector-the major Agri exports of India are cereals (mostly rice basmati and non-basmati) spices, cashew, oilcake/meals, tobacco, tea, coffee, and marine products.

Agriculture is the largest employment providing sector- 

In 2020 41.49 % of the workforce in India were employed in agriculture. While the share of Indians working in agriculture is declining, it is still the main sector of employment.

Provide raw material to industries-

(a) cotton textiles- the raw material in cotton balls from the cotton plant.

(b) Jute sacks- raw material is jute fiber from the jute plant.

(c) Any food/fruit processing industry.

(d) Tea/coffee processing raw materials are tea leaves/coffee leaves.

The agriculture sector provides food to the expanding population.

Share in national income-

 In 2019-20 contribution of agriculture to GVA was 16.5%.

Contribution to capital formation-

There is a general agreement on the necessary capital formation. Since agriculture happens to be the largest industry in developing countries like India, it can and must play an important role in pushing up the rate of capital formation. If it fails to do so, the whole process of economic development will suffer a setback.

So as agriculture plays such an important role in India’s economy. Let’s discuss strategies to improve the agricultural productivity in India-

  1. Social health enhancement

  2. Irrigation water supply augmentation and management

  3. Credit and insurance

  4. Technology

  5. Market

  6. Regionally differentiated strategy

  7. Improve agricultural practices- the introduction of crop rotation for maintaining healthy crop varieties. Improved post-harvesting handling. More efficient use of inputs, particularly an increase in the use of locally available inputs, such as composed and a reduction in the use of chemical fertilizers.


In a nutshell, Agriculture serves as the backbone of the INDIAN ECONOMY. Our dependence on the agriculture sector is extensive and efficient growth of the sector shall contribute extensively to the nation’s growth and development.

                                                                                          

                                                                                                          Article by- Kanupriya Chundawat

Edited by: Aastha Soni

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