India's agricultural development under the new economic regime: policy perspective and strategy for the 12th five-year plan

Abstract

Agriculture sector is the mainstay of the Indian economy, contributing about 15 per cent of national Gross Domestic Product (GDP) and more importantly, about half of India’s population is wholly or significantly dependent on agriculture and allied activities for their livelihood (Government of India, 2011a). The contribution of agricultural sector to GDP has continued to decline over the years, while that of other sectors, particularly services, has increased. In 1970-71 agriculture contributed about 44 per cent of GDP, which declined to 31.4 per cent and 14.6 per cent in 1990-91 and 2009-10 (at 2004-05 prices), respectively (CSO, 2011). Nevertheless, agriculture remains a major source of employment, absorbing about 52 per cent of the total national workforce in 2004-05, down from about 70 per cent in 1971. The share of agricultural exports in total export value declined from about 18.5 per cent in 1990- 91 to about 10.6 per cent in 2009-10, while the share of agricultural imports to total national imports increased from 2.8 per cent in 1990-91 and reached a high of 8.2 per cent in 1998-99 and declined to about 4.4 per cent in 2009-10 (Government of India, 2011b). The importance of agriculture in a country like India is not likely to decline due to concerns for food security, employment, rural poverty and availability of wage goods (Vyas, 2003).