Essay on the importance of agriculture in the Indian Economy


India is an agricultural country. The Indian economy is basically agrarian. In spite of economic development and industrialization, agriculture is the backbone of the Indian economy. As Mahatma Gandhi said, “India lives in villages and agriculture is the soul of Indian economy”. Nearly two-thirds of its population depends directly on agriculture for its livelihood. Agriculture is the main stay of India’s economy. It contributes about 26 percent of the gross domestic product. Agriculture meets food requirements of the people and produces several raw materials for industries.


Image Source:

From agricultural point of view, India is a unique country. It has vast expanse of level land, rich soils, wild climatic variations suited for various types of crops, ample sunshine and a long growing season. The net sown area in India today is about 143 million hectares. India has the highest percentage of land under cultivation in the world. In spite of the fact that large areas in India, after independence, have been brought under irrigation, only one-third of the cropped area is actually irrigated. The productivity of agriculture is very low. Farming depends mainly upon monsoon rain. Most of the production comprises food crops. About one-third of the land holdings are small, less than one hectare in size. Farmers own their own small prices of land and grow crops primarily for consumption. Even storage facilities for crops are inadequate. Now use of pesticides and fertilizers has increased and large areas have been brought under high yielding variety of seeds. This led to green revolution in several parts of India. This has helped in increasing yields per hectare as well as total production of different crops.

There are many reasons responsible for the low productivity of agriculture. About one-third of land holdings are very small less than one hectare in size. Due to small size of land holdings we cannot use modern way of cultivation. Even today the farmers are using very old methods, tools and implements for fanning. Farmers are not using artificial ways of cultivation. Inputs like-better quality of seeds, fertilizers and pesticides are also not used by most of the farmers. Exploitation of marginal farmers is also responsible. There is also low productivity because of increasing pressure on land and absence of bank credit.

Agriculture is the backbone of our Indian economy. Agricultural development is a precondition of our national prosperity. It is the main source of earning livelihood of the people. Nearly two-thirds of its population depends directly on agriculture. Agriculture provides direct employment to 70 percent of working people in the country. It is the main stay of India’s economy.

Apart from those who are directly involved in the agrarian sector, a large number of the population is also engaged in agro-based activities. Agriculture meets the foods requirements of large population of India. It ensures food security for the country. Substantial increase in the production of food grain like-rice, wheat etc. and non-food grains like-tea, coffee, spices, fruits and vegetables, sugar, cotton etc. has made India self-sufficient. Agriculture also contributes to the national income of our country. It accounts for 26 percent of the gross domestic product. The growth of most of the industries depends on agriculture. It produces several materials for industries. It forms the basis of many industries of India like-cotton, textile, jute, sugar industries etc by providing cotton, sugarcane, oilseeds etc. People engaged in agriculture also buy the products of industries like-tractors, pesticides, fertilizers, pump-set etc. Agriculture contributes in foreign exchange of our country. India exports agricultural products like tea, coffee, sugar, tobacco, spices etc and earns foreign currency. Exports from the agricultural sector have helped India in earning valuable foreign exchange and thereby boosting economic development. From above mentioned facts it is very clear that in spite of industrial development still agriculture is the backbone of the Indian economy.

The Five-year Plans accorded priority to the agricultural sector. In the past 50 years the food grain production in the country increased substantially from 51 million tonnes in 1950-51 to 209 million tonnes in 1999-2000. Inspite of the constant rise of population, we have been able to built a food stock of 44.7 million tonnes in 2001. This is because of the technological and institutional reforms in our country. The Indian government took several steps to improve the agricultural condition in the country. The government has encouraged consolidation of land holdings to promote use of modern farm machines. Land reforms were introduced. The government took lands of big land owners away and redistributed to landless labourers. The government abolished the Zamindari System. Modern methods of cultivation were introduced in the country. The government provided better infrastructure facilities such as— irrigation, electricity and transportation. Agricultural equipments such as— tractors, pump harvesters, fertilizers, pesticides were made available to farmers. Getting finance from banks was made easier for the farmers. The crop insurance was another step to protect the farmers against losses caused by crop failure on account of natural calamities like drought, flood cyclone etc. High-yielding varieties of seeds, fertilizers and irrigation gave birth to Green Revolution. All these led to tremendous increase in the production of crops.

The country on an average, has enough in stock to meet the food requirements of its citizens. India has emerged as the largest producer of coconut, ginger, cashew nut, black-peeper and as the second largest producers of fruits and vegetables. The productivity of the land has increased through the years, but has not reached international productivity levels. Indian agriculture has diversified into various sectors and contributes significantly to the nation’s economy. But this situation is not likely to remain so easy in the years to come. The population of India is likely to be around 1300 million. This would require a huge amount of food grains along with non-food grains. India has to use its vast potential of agriculture in a systematic and planned manner. We have to develops some of the techniques which the developed countries have been using.
