Importance of India's Agriculture Economy

Importance of India's Agriculture Economy

Last updated: Dec, 2022
Importance of India's Agriculture Economy

Agriculture is the foundation of India's livelihood, civilisation, culture and heritage. With a population of 1.39 billion, India is the second-most populous country in the world and is expected to overtake China as the most populated by 2027-30. With 328 million hectares (Mha) of land, India is the world's seventh largest country. India has ~160 Mha of arable land, the second largest after the US. The country experiences all 15 prominent climates. Moreover, India's landmass constitutes 46 of the 60 soil types found on the planet. It cultivates ~50% of its total geographical area, placing it among the top land users for agriculture. The proportion of cultivated land to the total geographical area often exceeds 90% in the more geographically suitable Indo-Gangetic Plain (IGP) and the deltas of the eastern coast. Indian agriculture, one of the world's oldest systems, is diverse, heterogeneous, unorganised and frequently subject to vagaries at various stages “from seed to market”. It is a critical sector of the economy for the country's long-term and inclusive economic growth. The sector employs 49.6% of the workforce, which is often seasonal, under-employed and underpaid, and accounts for ~17% of India's GDP. India’s large and diverse agricultural sector makes it a major producer of cereals, sugar, milk, fruits and vegetables, eggs and spices. The agriculture sector in India remains the backbone of its society, employing ~58% of the population. With only 4% of the world's water resources and 2.4% of the world's land, India supports 17.8% of the world's population and 15% of the livestock population. There is no other country with a more varied food and non-food agriculture base than India, which raises the prospect of India becoming a world agricultural trade leader.

The agricultural sector in India has performed admirably in recent years, expanding at a compounded annual growth rate (CAGR) of 3.7% between 2017-18 and 2021-22. In 2021-22, the estimated real agriculture gross value added (GVA) was Rs. 21.1 lakh crore (US$ 256.4 billion), accounting for 15.5% of total GVA and 6.4% higher than the pre-pandemic level. Even during the pandemic, the agriculture GVA increased for all products, including foodgrains, cereals, pulses and oilseeds, providing the country with the much-needed food security.

The country's total foodgrain production was estimated to be a record-high 314.6 million tonnes in 2021-22, an increase of 3.8 million tonnes over 2010-21. The production of cereals and pulses has increased at a CAGR of 2.0% and 1.8%, respectively, from 2017-18 to 2021-22.

The development of agriculture industry in India would not be possible if not for the various initiatives taken by the government to boost the sector.