Explain the importance of agriculture in Indian economy?

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Introduction:

Agriculture has been the backbone of the Indian economy for centuries, playing a very important role in its development and sustenance. One of the importance of agriculture is as one of the oldest sectors, it has shaped the social, cultural, and economic structure of the country. Despite of rapid industrialization and growth of the services sector, agriculture continues to be a significant contributor to India’s Gross Domestic Product (GDP) and a primary source of livelihood for a substantial portion of the population.

Importance of agriculture:

  1. Source of food and security: It is a source of food for millions of people. It supplies cereals, pulses, sugar and edible oil etc. ImportsĀ  of food grains consists of 5% of the total food requirement of the country India is now self sufficient in the production of food grain. Agriculture ensures the availability of food grains, necessary for the population.
  2. Largest employment Provider: A substantial portion of India’s population is employed in agriculture. It provides livelihoods to millions of rural households. Nearly 60% of the working population is engaged in agriculture. When we take into account the people who are indirectly dependent upon agriculture the ratio raises to more than even 3/4.
  3. Major component of national income: At present nearly 15% to 20% of the total annual national income comes from agriculture when taken independently, it contributes so much to the national income of our country. The share of agriculture in India’s national income has been decreasing steadily over the year from 56% in 1950- 51 when compare with the share of agriculture in the national income in advance countries agriculture in India contributes a very large amount to her national income.
  4. Supplies raw material: In India it is considered to be the mother of all industries. It supplies essential raw materials to many of our industries. There are certain industries like cotton, textile, jute and plantation will depend directly on agriculture for the development of few other industries like handloom, oil crushing, rice husking etc. depends on agriculture indirectly. It also buys industrial goods and thus encourages industries.
  5. Agriculture in international trade: It plays an important role in the export for a long period of time. In the past many of our exportable commodities consists of agriculture commodities like tea, coffee sugar, oilseeds, tobacco, cotton, jute and spices. There was a time when 50% of our export consisted of agriculture commodities with industrial development agricultural commodities at present account for 20% to 25% of India’s export trade.
  6. Agriculture is Source of revenue: It is the main source of revenue for the government, especially for the state government not only does the government get substantial income from land revenue but also from other sources because of favorable agriculture.
  7. capital formation: This sector is the primary source of domestic savings and hence capital formation of the economy since independence large investment both public and private has been made in agriculture.
  8. Socio- Cultural Practices: It is deeply rooted in Indian culture, traditions, and festivals. Many cultural practices and traditions are centered around agricultural activities. This activities promote social stability and unity in rural areas, providing a sense of community and shared purpose.
  9. Industrial Growth: It supports the growth of agro-based industries, which depend on agricultural products for raw materials. This includes industries such as textiles, sugar, and food processing. The agricultural sector also supports industries that produce inputs like fertilizers, pesticides, and farming equipment.

also read: explain the importance of public expenditure.

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