Role of Agriculture in Indian Economy 2020

In this article, we are going to see the ROLE OF AGRICULTURE IN INDIAN ECONOMY – 2020

ROLE OF AGRICULTURE IN INDIAN ECONOMY 2020: India as a predominantly agricultural country attributes a serious share of its overall development to the agriculture sector. Indian agriculture may be a miscellaneous and extensive sector involving an outsized number of stakeholders. India has one among the most important and institutionally most complex agricultural research systems within the world. However, such a posh research system wasn’t a sudden development. Instead, historically, it involved a process that started in the second half of the 19th century during the colonial period and eventually led to the establishment of the Imperial (now Indian) Council of Agricultural Research (ICAR). In the present research system, the role of ICAR at the national level in aiding, promoting, and coordinating research and education activities across the country is of serious importance. In this article, we trace the event of the agricultural research system in India, since the colonial era until today. Various factors influencing the general development of agricultural research systems within the country are discussed. Although agriculture has been playing the foremost vital role in the Indian economy, during the course of the study, it’s been observed that not much emphasis has been given to the history of the evolution of agricultural research in India.


Agriculture, as the backbone of the Indian economy, plays the most crucial role in the socio-economic sphere of the country. Indian agriculture is a diverse and extensive sector involving a large number of stakeholders. It has been one of the remarkable success stories of the post.


The Green Revolution contributed to the Indian economy by providing food self-sufficiency and improved rural welfare. Moreover, since independence, India has observed a considerable increase in the production of oilseeds (through the yellow revolution), milk (through the White revolution), fish (through the blue revolution), and fruits and vegetables (through the golden revolution). The role of the National Agricultural Research System (the NARS) was imperative in the context of all these momentous and successful upheavals.
The main events in the history of agricultural research in India can be grouped into the following seven category-

  • Establishment of agriculture departments and agriculture colleges.
  • Establishment of the Imperial Council of Agricultural Research.
  • Initiation of commodity committees.
  • Project for intensification of regional research on cotton, oilseeds, and millets.
  • Initiation of all-India coordinated crop improvement projects
  • Initiation of all-India coordinated crop improvement projects
  • Reorganization of the Indian Council of Agricultural Research (ICAR) and the development of agricultural universities.

Among these, the first three signify the development of agriculture in the colonial India, whereas the next four were prominent in the post-colonial era.


Agriculture and allied sectors such as forestry and fisheries account for 19% of India’s Gross Domestic Product and employs about 60 percent of the country’s entire workforce. It also accounts for 10.95% of India’s exports.


The agriculture sector is important for industrial development as it supplies raw materials to industries. Some depend on agriculture directly, like textile industries and sugar mills, while others indirectly like breweries. Growth in agricultural production helps develop various types of industries and diversification of employment. So a shortfall in agricultural output has an adverse effect on industrial production, affecting prices and causing an imbalance in the economy


The Indian economy has transformed in the past two decades. The share of agriculture within the GDP has declined over the years. In the meantime, the share of mining, manufacturing, electricity and construction sectors has increased from 21.6% in 1970-71 to 27% in 2004-05. The service sector has increased from 32% to 52.4% during the same period


Some of the main recent government initiatives in the sector are:

In May 2020, the Government announced the launch of the animal husbandry infrastructure development fund of Rs 15,000 crore (US $ 2.13 billion).

In September 2019, Prime Minister Narendra Modi launched the National Program for the Control of Animal Diseases (NADCP), which is expected to eradicate foot-and-mouth disease and brucellosis in livestock. In May 2020, Rs 13,343 crore (US $ 1.89 billion) was allocated to the scheme.

In May 2019, NABARD announced an investment of a venture capital fund of Rs 700 crore (US $ 100 million) for capital investment in agriculture and rural-focused startups.

Under the 2019-20 Union Budget, Pradhan Mantri Samman Nidhi Yojana was introduced where a minimum fixed pension of Rs 3000 (US $ 42.92) was to be provided to eligible smallholders and marginals, subject to certain exclusion clauses, upon reaching the age of 60.

The Government of India introduced a Transportation and Marketing Assistance (TMA) scheme to provide financial assistance for the transportation and marketing of agricultural products to boost agricultural exports.

The Agriculture Export Policy, 2018 was approved by the Government of India in December 2018. The new policy aimed to increase India’s agricultural export to $ 60 billion by 2022 and $ 100 billion in next years with a stable trade policy regime.

The Government of India will provide Rp 2 billion ($ 306.29 million) for the computerization of the Primary Agricultural Credit Society (PACS) to ensure that cooperatives benefit from digital technology.

The Government of India launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an investment of Rs 50,000 crore (US $ 7.7 billion) for the development of irrigation sources to provide a permanent solution against drought.

The government plans to triple the capacity of the food processing sector in India of the current 10 percent of agricultural products and has also committed Rs 6,000 crore (US $ 936.38 billion) as investments for mega food parks in the country, as part of the Scheme for Agro-Marine Processing and Development of Agro-Processing Groups (SAMPADA).

The Government of India has allowed 100 percent FDI in food marketing and e-commerce for food products under the automatic route.


The National Electronic Market for Agriculture (e-NAM) launched in April 2016 to create a unified national market for agricultural products by networking existing APMCs. It had 16.6 million farmers and 131,000 merchants registered on its platform as of May 2020. More than 1,000 mandis in India are already linked to e-NAM and an additional 22,000 mandis are expected to be linked by 2021-22.

The sale of tractors in the country amounted to 804,000 units in 2019 with an export of 80,475 units.

During fiscal year 20 (until February 2020), tea exports were $ 709.28 million.

Coffee exports were US $ 742.05 million in fiscal year 20.


India is expected to achieve the ambitious goal of doubling agricultural income by 2022. The agricultural sector in India is expected to generate better momentum in the coming years due to increased investment in agricultural infrastructure such as irrigation, storage and storage facilities in the cold. Furthermore, the increasing use of genetically modified crops is likely to improve yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming years due to scientists’ concerted effort to obtain early-maturing varieties of pulses and the increase in the minimum support price.


In the future, the adoption of food safety and quality assurance mechanisms, such as Total Quality Management (TQM), which includes ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Practices for Manufacturing (GMP) and Good Hygienic Practice (GHP) by the food processing industry will offer several benefits. India’s agricultural exports are likely to reach the goal of $ 60 billion by 2022.

See also:

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