Agricultural Economy of India


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Agriculture occupies a key position in the Indian economy. Though agriculture has shrunk as a proportion of the gross domestic product (GDP) to around 13 percent, it is a vital sector and provider of livelihood for two-thirds of India's working population. Agriculture being a State subject, the bulk of public investment in agriculture takes place at the level of States, with the Central Government supporting the States as a catalyst. The agricultural policy followed since Independence in 1947 can be broadly classified into three phases. Phase one, immediately after Independence, witnessed several institutional changes through land reforms and initiation of major irrigation projects. The second phase, starting in the mid-1960s, was aimed at increasing agricultural productivity to attain self-sufficiency in food-grains through technological revolution and government support for credit, marketing, and extension services. This was followed by the current phase, started in the late 1980s, aimed at making agriculture more market-oriented. Unfortunately, in recent years the Indian economy has witnessed a loss of dynamism in the agriculture and allied sectors. The agriculture sector, as a whole, has showed poor performance. Signs of agrarian distress are visible in parts of the country, with spate of suicides by farmers in some areas being the most disturbing manifestation of this distress. Marginal and small farmers have borne the brunt of the adverse circumstances in agriculture. Concerned by the slow growth in the agriculture and allied sectors, the Indian government has launched a series of programs to rejuvenate agriculture and improve farm income. The present work explains and examines the key reform measures undertaken for the modernization of Indian agriculture. Challenges facing this vital sector of the economy are also discussed. [Subject: Agriculture, India Studies, Economics, Development Studies, Sustainable Development, Economic Development]