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Importance of Agriculture

Agriculture plays a vital role in India’s economy. Agriculture, with its allied sectors, is the largest source of livelihood in India. 54.6% of the total workforce is engaged in agricultural and allied sector activities while 57.8% of rural households are engaged in agriculture. Taking small and marginal holdings together, agriculture constituted 86.08% of the total land holdings in 2015-16, according to the Annual Report (2020-21) of the Ministry of Agriculture and Farmers Welfare. Importantly, 30.33% of total cultivators and 40.67% of agriculture labour are women.

India has the second-largest arable land resources in the world. With 20 agri-climatic regions, all the 15 major climates in the world exist in India. The country also has 46 of the 60 soil types in the world.

India is the largest producer of pulses, jute, milk, tea and the second largest producer of tobacco, wheat, rice, fruits and vegetables, sugarcane, cotton, and oilseeds.

India’s Position in World Agriculture
Sl.No. Crop India’s
(Million Tonnes)
(Million Tonnes)
% Share of
1 Pulses 25.5 92.32 27.63 1st
2 Jute 1.95 3.63 53.72 1st
3 Wheat 99.70 734.05 13.58 2nd
4 Sugarcane 376.90 1907.02 19.76 2nd
5 Groundnut 9.25 50.89 18.18 2nd
6 Paddy 172.58 782.00 22.07 2nd
7 Tobacco 0.75 6.09 12.30 2nd
8 Tea 1.34 6.34 21.22 2nd
9 Potatoes 48.53 368.17 13.18 2nd
10 Onion (Dry) 22.07 96.77 22.81 2nd

Source: Pocket Book of Agricultural Statistics 2020, Ministry of Agriculture and Farmers Welfare, Govt. of India

According to the Economic Survey 2021-22, agriculture sector has experienced buoyant growth in the past two years. Agriculture and allied sectors are expected to grow by 3.9 per cent in 2021-22 after growing 3.6 per cent in the previous year.

The sector, which is the largest employer of workforce, accounted for a sizeable 18.8 per cent (2021-22) in Gross Value Added (GVA) of the country. Growth in allied sectors including livestock, dairying and fisheries has been the major drivers of overall growth in the sector.

Share of Agriculture in GDP and Employment
Sl.No. Country Agriculture, Forestry and Fishing
– Value Added
(% of GDP)
Employment in
(% of Total
1 India 16.02 42.6
2 Indonesia 12.72 28.5
3 China 7.11 25.3
4 Turkey 6.42 18.1
5 Mexico 3.39 12.5
6 Brazil 4.44 9.1
7 Russia 3.45 5.8
8 South Africa 1.88 5.3
9 Republic of
1.62 5.1
10 European
1.62 4.4
WORLD NA 26.88

Source: World Development Indicators, World Bank; Pocket Book of Agricultural Statistics 2020, Ministry of Agriculture and Farmers Welfare, Govt. of India. (Data for the year 2018)

India can be among the top five exporters of agro-commodities by shifting its focus on cultivation and effectively handholding farmers, according to the World Trade Centre. The total agricultural and allied products exports stood at US$ 41.25 billion in FY21.

Given the importance of the agriculture sector, Government of India has taken several steps for its development in a sustainable manner. Steps have been taken to improve the income of farmers. Further, to mitigate risk in the agriculture sector, a scheme “Pradhan Mantri Fasal Bima Yojana” (PMFBY)was also launched in 2016. Schemes such as Formation & promotion of 10,000 Farmer-Producers’ Organizations and the Agriculture Infrastructure Fund have also been launched recently to benefit the sector.

Pradhan Mantri Gram Sinchai Yojana (PMGSY) is another scheme aiming to irrigate the field of every farmer and improve water use efficiency to achieve the motto, `Per Drop More Crop’. Overall, the scheme ensures improved access to irrigation.

  1. Annual Report – 2020-21, Ministry of Agriculture and Farmers Welfare, Government of India
  2. The Economic Survey 2021-22, Government of India