Why does agricultural sector only produces a quarter of national gdp?
Answers
The agricultural sector is the largest employer in the Indian economy. It employs nearly 51% of the labour force in India. However, this sector accounts for only about 17% of India's GDP.The relatively low contribution to GDP despite employing the largest portion of the workforce is due to the low productivity of the agricultural sector. The output of crops like rice and wheat per hectare of land is much less in India than in other countries like the USA, France or China. As a result, even the large workforce cannot produce a very high amount of farm output that can contribute more to GDP. The low productivity of Indian agriculture is, in turn, due to the following reasons.
a. The average size of land holdings is very small in India. b. The absence of alternative employment alternatives like manufacturing industries in many parts of rural India causes the small farms to be over-manned disguised unemployment and low productivity of labour.
c. The small farms hamper the adoption of modern technology in agriculture that can enhance productivity.
d) Lack of modern irrigation facilities also contribute to low productivity.
e) The system of providing financing and marketing agricultural activities in India is not efficient. As a result, farmers may not be able to get loans to make investments. They also find it difficult to access large markets.