1. Contribution to India’s Gross Value Added (GVA)
The share of Agriculture and allied activities contributes to about Rs 47 lakh crores (2023-24 current prices) which is about 17% of total GVA at current prices levels. Although the share has come down from 53% in 1950-51, still it is considered as the backbone of Indian economy.
Total GVA of India: Agriculture contributes about 47 lakh crore of the total 267 lakh crore GVA of India. It is 17% of total GVA of India
Contribution of food grains: Rs 3.4 lakh crore which is roughly 7 % of total agri GVA.
Contribution of livestock sector: 30 % of agri GVA
Contribution of horticulture sector: 33% of agri GVA
2. Source of employment and poverty alleviation
Agriculture provides employment to roughly 40% of total workforce in India. Although the proportion since independence has come down but due to rapid population growth, the absolute number is very large. Compared to advance economies, this proportion is quite large as economies like Japan, USA have share of workforce in agriculture in the range of 2-3 percent.
Nevertheless, due to this large reliance of workforce on agriculture, the sector is at the forefront of various poverty alleviation programmes. The GVA from agriculture has higher effectiveness in terms of distribution of income as compared those from other sectors especially services sector. This means that agriculture income has a far more inclusivity and is a tool for poverty alleviation than compared to service sector where the income tends to be concentrated among top one percent.
3. Source of food to large population
Because of rapid increase in population and constant land area under cultivation. Modern technology in agriculture ensures food surplus at relatively stable prices. Moreover, as income rises, the quality of consumption of food towards more nutritious food also increases. Development in agriculture ensures food security for all.
4. Support to industries
Agriculture provides various raw materials to industries. For example, jute industry, sugar industry, cotton textiles etc depend directly on agricultural production to sustain the supply of raw materials. Similarly, the rural economy directly or indirectly depends on agriculture for increased purchasing power. Thus, agriculture acts like a catalyst in the rural consumption growth.
5. Importance in international trade
There are many agricultural products like rice, sugar and fisheries products like shrimps which are some the highest products which earn foreign exchange reserves. For example, in the fiscal period 2022-23, India’s agricultural exports reached USD 53.1 billion.
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