Importance of agriculture in Indian Economy

Importance of agriculture in the national economy can be summarized in the following points:

• 22-27% of population and half of the labour force dependent on agriculture
• 18% of India’s GDP comes from this sector as per latest numbers
• Good crops increase purchasing power of the farmers, which leads to greater demand for manufactured products. Thus prosperity of farmers leads to prosperity of other industries. We note that rural markets are a large segment of market for durable products also.
• Failure of agriculture can derail the whole economic planning. This lesson was learnt during second and third five year plans and also in early 2000s.
• Most of the internal trade in the country is in agricultural products.
• Agricultural growth has direct impact on poverty eradication; it is important factor in containing inflation; raising farm wages and employment generation.
• Allied sectors such as horticulture, animal husbandry, dairy and fisheries have an important role in improving the overall economic conditions and health and nutrition of the masses.