Role of agriculture in economic

development

Sarvesh chauhan
1cr09mba69
ROLE OF AGRICULTURE IN ECONOMIC
DEVELOPMENT
 Share in national income.
 Largest employment providing sector.
 Provision of food surplus to the expanding population.
 Contribution to capital formation.
 Providing raw materials to industries.
 Market for industrial products.
 Importance in international trade.
 Importance of agricultural products in the consumption
basket.
Share in national income
• Agriculture contributed two-thirds of national income in india.
From 55.1% in 1950-51, the share of agriculture in gross
domestic product at factor cost declined steadily to 17.0% in
2008-09 (at 1999-2000 prices).

Largest employment providing sector.

In 1951, 69.5 percent of the working population was
engaged in agriculture. This percentage fell to 66.9 percent
in 1991 and to 52.4 percent in 2004-05.
Provision of food surplus to the expanding
population.
• It can be stated that the income elasticity of demand for
food is very high in developing countries.

Contribution to capital formation.

Generating of surplus from agriculture will ultimately depend
on increasing the agricultural productivity considerably.
Providing raw material to industries
• Agriculture provides raw material to various industries of
national importance- sugar industry, jute industry, cotton
textile, vanaspati industry are example of some such
industries which depend on agriculture for their
development.

Market for industrial products.

Since more than two-thirds of the population of developing
countries lives in rural areas, increased 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, textiles, jute, and tea – accounted for more
than 50 percent of export earnings of the country.

Importance of agricultural products in the

consumption basket.
The per capita income in india is very low. Consequently, a
large part of this income is spent of fulfilling the basic
consumption requirements of the people. It has been
estimated that in india approximately 60% of household
consumption and 85% of household commodity
consumption is of agricultural products.
Thank you