Indian economy is based on agriculture explain
Answers
Agriculture plays a vital role in the Indian economy. Over 70 per cent of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, accounts for one-third of the nation's GDP and is its single largest contributor.
i. Share of Agriculture in National Income:
Agriculture has got a prime role in Indian economy. Though the share of agriculture in national income has come down, still it has a substantial share in GDP. The contributory share of agriculture in Gross Domestic Product was 55.4 percent in 1950-51, 52 percent in 1960-61 and is reduced to 18.5 percent only at present. The share of the agricultural sector’s capital formation in GDP has declined from 2.2 percent in the late-1999s to 1.9 per cent in 2005-06.
ii. Important Contribution to Employment:
Agriculture sector, at present, provides livelihood to 65 to 70 per cent of the total population. The sector provides employment to 58.4 per cent of country’s workforce and is the single largest private sector occupation.
iii. Important Source of Industrial Development:
Various important industries in India find their raw material from agriculture sector -cotton and jute textile industries, sugar, vanaspati, etc. are directly dependent on agriculture. Handlooms, spinning oil milling, rice thrashing, etc. are various small scale and cottage industries, which are dependent on agriculture sector for their raw material. This highlights the importance of agriculture in industrial development of the nation.
iv. Importance in International Trade:
India’s foreign trade is deeply associated with agriculture sector. Agriculture accounts for about 14.7 per cent of the total export earnings. Besides, goods made with the raw material of agriculture sector also contribute about 20 per cent in Indian exports.
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2/3 of India's population is still dependent on agriculture. It is based on the following facts:
Fact 1: The share of agribusiness in India's GDP has consistently declined since 1950, which used to be minimal more than 52% and now stands near 16– 17%. In examination the % of other two divisions in GDP ( Industry and Services) now stands near 20+% and 55+% individually.
In 1950, the GDP of India was around 40 Bn USD which came to about 900 Bn USD in 2015. Thus, Agricultural sectors expanded from 20.5 Bn USD to 150+ Bn USD somewhere in the range of 1950 and 2016.
Fact 2: Employment in the agribusiness Sector as Share of aggregate workforce is around half out of around 500 million laborers in India. In 1951,population occupied with agribusiness were around 100 million out of 140 million working populace.