ROLE OF AGRICULTURE IN INDIAN ECONOMY
Agriculture is the most important and primary sector of Indian Economy. Agriculture sector in India is therefore rightly called as backbone of Indian economy. It has a critical role in ensuring food security, reducing poverty and sustaining growth in India.
The role of Agriculture in Indian economy will be clearer from the following facts: –
- Share in national income: From the very beginning, agriculture is contributing a major portion to our national income. In 1950-51, agriculture and allied activities contributed about 59 per cent of the total national income. Although the share of agriculture has been declining gradually with the growth of other sectors but the share still remained very high as compared to that of the developed countries of the world.
- Agriculture plays vital role in generating employment: In India over two-thirds of our working population are engaged directly on agriculture and also similarly depend for their livelihood.
- Supply of raw material to agro-based industries: Agriculture in India has been the major source of supply of raw materials to various important industries of our country. Cotton and jute textiles, sugar, vanaspati, edible oil plantation industries (viz. tea, coffee, rubber) and agro-based cottage industries are also regularly collecting their raw materials directly from agriculture.
- Source of food security to the expanding population: Agriculture is the only major source of food supply as it is providing regular supply of food to such a huge size of population of our country. It has been estimated that about 60 percent of household consumption is met by agricultural products.
- Market for industrial products: Since more than two thirds of the population of developing countries like India lives in rural areas, increases rural purchasing power is a valuable stimulus to industrial development.
- Importance in international trade: For a number of years the three agriculture-based exports of India- cotton, jute and tea accounted for more than 50 percent of export earnings of the country.
GDP: It is the monetary value of all finished goods and services made within a country during a specific period
- Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2019-20 is estimated at ₹ 145.66 lakh crore, as against the First Revised
- Estimate of GDP for the year 2018-19 of ₹ 139.81 lakh crore. The growth in GDP during 2019-20 is estimated at 4.18 percent.
- Nominal GDP or GDP at current prices in the year 2019-20 is estimated to attain a level of ₹ 203.40 lakh crore against the First Revised Estimates of ₹ 189.71 lakh crore in 2018-19, showing a growth rate of 7.21 percent.
According to the IMF World Economic Outlook (October-2020), India’s nominal GDP in 2020 is projected at $2,593 billion at current prices. This projection would make India the 6th largest economy globally; one position down compares to the 5th spot in 2019. India attained the highest 5th rank in 2019 and lowest 17th in 1991.
India contributes 3.09% of the entire world’s GDP. India’s share of the world economy increased from 1.08 percent in 1993 to the current estimate of 3.28 percent in 2019.
CONTRIBUTION OF AGRICULTURE IN GDP
This sector includes forestry and fishing also. This sector is also known as the primary sector of the economy. At the time of Indian independence, this sector had the biggest share in the Gross Domestic Product of India. But year by year its contribution goes on declining and currently, it contributes only 17% of Indian GDP at current prices. It is worth to mention that the agriculture sector provides jobs to around 53% population of India.
Gross Value Added (GVA) at current prices for the agriculture sector is estimated at 32.57 lakh crore INR in 2019-20. The While Agriculture and allied sector share 17.76% of total India’s GVA of 183.43 lakh crore Indian rupees.
POLICIES IN AGRICULTURE:
The Government has taken a number of steps in order to improve post-harvest infrastructure in various States of the country. Government is implementing:
- RASHTRIYA KRISHI VIKAS YOJANA-REMUNERATIVE APPROACHES FOR AGRICULTURE AND ALLIED SECTOR REJUVENATION (RKVY-RAFTAAR)
- Scheme with major focus for development of pre & post-harvest infrastructure, besides promoting agri-entrepreneurship and innovations.
- It is aimed at strengthening infrastructure in Agriculture and Allied sectors to promote Agripreneurship and Agribusiness by facilitating financial aid and nurturing a system of business incubation.
- PRADHAN MANTRI KISAN SAMPADA YOJNA (PMKSY)
- The objective of PMKSY Scheme of creation of modern infrastructure along with efficient supply chain management for the entire processing value chain
- The Central Sector Scheme – SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) was approved by the cabinet in May 2017 for the period of 2016-20 coterminous with the 14th Finance Commission cycle. The scheme has now been renamed as the “Pradhan Mantri Kisan Sampada Yojana (PMKSY)”.
Under PMKSY the following schemes are to be implemented.
- Mega Food Parks
- Integrated Cold Chain, Value Addition and Preservation Infrastructure
- Creation/Expansion of Food Processing/Preservation Capacities
- Infrastructure for Agro Processing Clusters
- Scheme for Creation of Backward and Forward Linkages
- Food Safety & Quality Assurance Infrastructure
- Human Resources and Institutions
PMKSY with an allocation of Rs. 6,000 crore is expected to leverage investment of Rs. 31,400 crore, handling of 334 lakh MT agro-produce valuing Rs. 1,04,125 crore, benefit 20 lakh farmers and generate 5,30,500 direct/ indirect employment in the country by the year 2019-20.
- KRISHONNATI YOJANA
Krishonnati Yojana” is an Umbrella Scheme in agriculture sector that has been implemented since 2016-17 by clubbing several schemes / missions under one umbrella scheme. The scheme has now been continued for the period from 2017-18 to 2019-20 with the Central Share of Rs. 33,269.976 crore.
- The Umbrella scheme comprises of 11 Schemes/Missions. These schemes look to develop the agriculture and allied sector in a holistic and scientific manner to increase the income of farmers by enhancing production, productivity and better returns on produce. The Schemes will be continued with an expenditure of Rs.33,269.976 crore for three financial years, i.e., 2017-18, 2018-19 and 2019-20.
Schemes / Missions covered
- Mission for Integrated Development of Horticulture (MIDH)
- National Food Security Mission (NFSM)
- National Mission for Sustainable Agriculture (NMSA)Sub-Mission on Agriculture Extension (SMAE): With a total central share of Rs.2961.26 crore.
- SMAE aims to strengthen the ongoing extension mechanism of State Sub-Mission on Seeds and Planting Material (SMSP):.
- Sub-Mission on Agricultural Mechanisation (SMAM):
- Sub Mission on Plant Protection and Plan Quarantine (SMPPQ):
- Integrated Scheme on Agriculture Census, Economics and Statistics (ISACES):
- Integrated Scheme on Agricultural Cooperation (ISAC)
- Integrated Scheme on Agricultural Marketing(ISAM)
- National e-Governance Plan(NeGP-A): With a total central share of 211.06 crore aims to bring farmer centricity & service orientation to the programmes
4.Pradhan Mantri Annadata Aay Sanrakshan Abhiyan
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is an umbrella scheme aimed at ensuring remunerative prices to the farmers for their produce.
Components of PM-AASHA
The new Umbrella Scheme includes the mechanism of ensuring remunerative prices to the farmers and is comprised of
- Price Support Scheme (PSS) – In Price Support Scheme (PSS), physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with proactive role of State governments. It is also decided that in addition to NAFED, Food Cooperation of India (FCI) will take up PSS operations in states /districts. The procurement expenditure and losses due to procurement will be borne by Central Government as per norms.
- Price Deficiency Payment Scheme (PDPS) – Under Price Deficiency Payment Scheme this scheme (PDPS), it is proposed to cover all oilseeds for which MSP is notified. In this direct payment of the difference between the MSP and the selling/modal price will be made to pre-registered farmers selling his produce in the notified market yard through a transparent auction process.
- Pilot of Private Procurement & Stockist Scheme (PPPS).
It has also been decided that participation of private sector in procurement operation needs to piloted so that on the basis of learnings the ambit of private participation in procurement operations may be increased. In expenditure It has been decided to give additional government guarantee of Rs.16,550 crore making it Rs. 45,550 crore in total.
In addition to this, budget provision for procurement operations has also been increased and Rs. 15,053 crore is sanctioned for PM-AASHA implementation
5. Pradhan Mantri Krishi Sinchai Yojana
The overreaching vision of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) is to ensure access to some means of protective irrigation to all agricultural farms in the country, to produce ‘per drop more crop’, thus bringing much desired rural prosperity. Government allotted Rs 3949 crores for this scheme.
6.Pradhan Mantri Fasal Bima Yojana
The new Crop Insurance Scheme is in line with One Nation – One Scheme theme. It incorporates the best features of all previous schemes and at the same time, all previous shortcomings / weaknesses have been removed. The PMFBY will replace the existing two schemes National Agricultural Insurance Scheme as well as the Modified NAIS.
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