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324 The Indian Economy Since 1991

Characteristics of Three Types of Countries (2005)

Agriculture Urbanized
based Transforming countries
TA B L E 1 9 . 1

Rural population (millions) 417 2220 255

Share of rural population (%) 68 63 26
GDP per capita (USD) 379 1028 3489
Share of agriculture in GDP 29 13 6
Annual Agricultural
GDP growth (%) 4 2.9 2.2
Annual non-agricultural
GDP growth (%) 3.5 7 2.7
Rural population (millions 2002) 170 583 32
Rural poverty rate (% 2002) 51 28 13

Source: World Development Report, 2008.

agriculture in the Indian economy and (3) to analyse the trends in the area, production
and yield of the major crops in India.

19.2 Agriculture Sector in India

Agriculture is considered to be the pivotal sector in India, even prior to the British period.
Since independence, the government gave sufficient attention to the development of agri-
culture and allied sectors, in all the five year plans. Table (19.2a) presents the growth and
share of agriculture in India since 1950.
It is seen that the share of agriculture has been consistently coming down over the
years. However, a noticeable fall happened after 1991. By 1990, the share of agriculture in
the GDP of India came down to 34.9 per cent, this further reduced to just 17.8 per cent
in 2009. From these trends it is clear that the Indian agriculture is moving towards stagna-
tion. At the same time, the percentage of population depending on agriculture continued

Share of Agriculture in India Since 1950

TA B L E 1 9 . 2 a

Particulars 1951 1961 1971 1981 1991 2001 2009

Share in GDP 59.2 57.8 52.3 44.2 34.9 26.6 17.8
Percentage of population
depending on agriculture 69.5 67.8 66.2 64.7 63.4 60.0 59.2
Share in exports 15.8 15.9 15.2 14.3 16.7 12.7 16.2
Average growth 3.2 2.4 3.2 3.7 3.1 2.9 2.5

Source: Compiled from Economic Survey, Government of India; Ministry of Agriculture and Cooperation,
Government of India, Volume on Agriculture, Centre for Monitoring Indian Economy (CMIE).
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Agriculture Growth and Performance 325

Figure 19.1: Share of Agriculture in India (1951–2009)

80

70

60

50 Year
GDP
40
Labour
30 Exports

20

10

0
1 2 3 4 5 6 7

to be at a higher level. In 1951, 69.5 per cent of population depended on agriculture,

which continued only with marginal variations in the later years. According to the latest
statistics, still 59.2 per cent of the population depends on agriculture. It is also found that
over the years, the average age of the farmers is going up indicating that the younger gen-
eration is withering away from the agricultural operations. These trends raise two ques-
tions. Firstly, even after a significant share of population depending on agriculture and
allied sectors, why is there a fall in contribution towards the GDP? Secondly, why has the
average age of farmers gone up? It is found that the share of agricultural exports, in
the total exports of India remained at 15.8 per cent in 1951, which continued more or less

Figure 19.2: Growth Rate of Agriculture (1951–2009)

4.0

3.5

3.0

2.5

2.0 Growth

1.5

1.0

0.5

0
1 2 3 4 5 6 7