Role of Agriculture in Indian Economy.

The following are the main Roles of Agriculture in Indian Economy:

(i) Contribution to national income: From the very beginning agriculture is contributing a major portion to our national income. In 1950 to 1951 agriculture and allied activities contributed about 59% (percent) of to total national income. Although the share of the 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.

(ii) Sources of livelihood: In Indian over two- third of our working population are engaged directly on agriculture and also similarly depend for their livelihood. According to the estimate about 60% of our working population are engaged in agriculture at present in comparison to that of 2 to 3% (percent) in U.K and USA 6% in France and 7% (percent) in Australia. Thus the employment problem of our country is very much common to other under developed countries of the world.

(iii) Sources of food supply: Agriculture is the only major source of food supply as it is providing regular supply of food to such as huge size of population of our country. It has been estimated that about 60% of household consumption is meet by agriculture products.

(iv) Role of Agriculture for Industrial development: 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 ( tea, coffee and argo based) cottage industries are also regularly collecting their raw materials directly from agriculture.

(v) Commercial importance: Indian agriculture is playing a very important role both in the internal and external trade of the country. Agricultural products like tea, coffee, sugar, etc are the main items of our export and constitute  about 50 percent of our total export.

(vi) Sources of government revenue: Agriculture is one of the major source of revenue to both the Central and state governments of the country. The government is getting a substantial income from rising land revenue some other factor like railway, roadways are also deriving a good part of their income from the movement of agriculture goods.

(vii) Role of Agriculture in economic planning: The prospect of planning in India also depends much on agriculture sector. A good crop always provides impetus towards a planned economic development of the country by creating a better business climate for the transport system, manufacturing industries, internal trade etc.