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Agriculture, along with related sectors such as forest, forest clearing, and fisheries, contributed 18.6% to the Indian GDP in 2005, employed 60% of the total labor force, and, while steadily declining as a percentage of the GDP, is still the largest economic sector and plays an important role in Indias overall socio-economic development. While the share of agriculture in the Indian economy has been gradually declining, falling below 15%, because of high rates of industrial and service sector growth, the sectors importance to the Indian economy and societal fabric goes far beyond that indicator. Indias agriculture sector is still highly significant for Indias economy, even though its share of the economy has declined in the last 50 years.

Despite improvements in the productivity of Indias agriculture sector in the last few decades, the productivity remains poor by international standards, with growth of productivity being only slightly above the global average (Figure 2). As Indias economy has been diversifying and growing, the share of agriculture in the gross domestic product has declined consistently from 1951 to 2011. While agriculture has achieved wheat self-sufficiency in India, the output is, however, resource-intensive, grain-centric, and regionally biased.

The past three decades has witnessed strong agricultural productivity and, crucially, the production of crops has been able to largely keep up with demand of Indias already huge population. Agricultural growth in the 1990s and 2000s has slowed, with average annual growth of around 3.5%, with grain yields increasing by just 1.4% in the 2000s. Overall, though, the growth effects from increased farm productivity decline naturally as the farm sector grows larger as a share of GDP.

Consistent with our descriptions in our earlier section of subnational growth experiences, high-productivity agricultural sectors, spurred by introduction of the Green Revolution, are an economic engine of growth in growth states led by agriculture. Between the 1980s and the 2000s, greater development and growth in the agricultural sector was driven by diversification of cropping systems from food staples to cash crop production, and greater use of fertilisers as inputs to the production process (G.S. Bhalla & Singh, 1997). India has made substantial advances in agriculture in the past few decades, including introduction of higher-yielding seed varieties, increased use of fertilisers, and improvements in water management systems.

The growth and success of agriculture is essential to long-term economic growth of India, improving global and export competitiveness of India, improving rural livelihoods, and creating sustainable eco-systems in agriculture. The challenges that Indias agriculture scenario is burdened with at present are numerous, but that does not at all detract from the importance of agriculture and the role that it can play in holistic, inclusive growth for the nation. Agriculture has been a mainstay of Indias economy for decades now, and remains critical in providing food security for the nations growing population. Now declining to about 13% of Gross Domestic Product (GDP), agriculture is an essential sector, providing sustenance for 2/3rds of Indias working population.

The cattle sector, mostly derived from milk, contributes more than one-quarter of agricultures GNP, and is the source of income for 70% of Indias rural households, mainly poorer households headed by women. The increasing feminisation of agriculture is due in large part to increased migration from rural areas to cities by men, an increase in women-headed households, and an increase in the production of cash crops, which are labor-intensive. Women are performing substantial tasks, either on farms or in non-farm activities, and there is a growing involvement in this sector, yet, their labour is treated as supplementary to the labour of their households, adding a double load of domestic responsibility. The economy has become polarized between the high-productivity, modern, and globally integrated formal sector, which employs around 10% of the workforce, and a lower-productivity sector, composed of farming and informal activities in cities, which engages 90% of the workforce.



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