This document discusses the contribution of the agricultural sector to India's GDP over time and the implications for policymaking. It notes that while agriculture's share of GDP has declined to around 15%, it still provides livelihoods for over half of India's population. The document also outlines key trends in the agricultural sector GDP, public investment levels, important government missions to increase oilseed and horticulture production, and reforms to privatization, contract farming, and excise duties that influence agricultural policies. Main features of policies aim to promote privatization, contract farming, taxation changes, technology, and soil fertility improvements.

1. Contribution of Agricultural
Sector to GDP: Trend and Policy
Implications
SUBMITTED BY GROUP 8
Gowri Shankar.R
Minhaj Ali
Seetha Sowjanya
Sohit Kumar
Vigneshwaran.P

2. Introduction
• The share of agriculture in the total GDP has steadily declined
to a level of around 15% over the past two decades.
• More than 60 per cent of the workforce draws its sustenance
from this sector one way or the other.
• The related phenomenon of “food inflation” which appears to
have gripped all countries adds to the importance with which
policy makers need to give agriculture as regards both short
run as well as long run policies.

3. Contd.,
• Perspectives influenced by short run developments as far as possible.
Despite this, the growth rate fluctuates between nearly 7 per cent in
period 4, and over 5 per cent in period 9, to 0.56 in period 3, and 0.41
percent in period 8.
• The available data also show how real public investment has steadily
declined from period 1 to period 7, from about Rs. 105 billion to Rs. 37
billion respectively.
• A clear shift in public policy away from public investment in general and in
particular in agriculture as a part of the new economic policy regime is
quite clear.

4. Agriculture sector a must for GDP
growth
• Kisaano ki Samriddhi”, the well-being of farmers is vital to the nation's
prosperity. Kisan is the sentinel of our food security.
• The share of agriculture in employment was 48.9 per cent of the
workforce. In other words, Agriculture is the principal source of livelihood
for more than 58% of the population of this country.
• Agriculture is a state subject as per the constitutional list of VII schedule
• The concept of competitive Federalism to Competitive Sub-Federalism
besides the smart city mission, agriculture development is needed at the
grass root level.

5. GDP OF AGRICULTURE & ALLIED
ACTIVITIES
• GDP of agriculture and
allied sectors in India was
recorded at USD244.74
billion in FY16.
• According to the advanced
estimates of MOSPI,
agriculture and allied sector
recorded a CAGR rise of
6.64 per cent during FY07-
16
• Agriculture is the primary
source of livelihood for
about 58 per cent of India’s
population.
Source:www.tradingeco.net

6. POLICIES & IMPLICATIONS

7. CONTINUED......

8. Trends (Missions for GDP
increase)
• NMOOP (National Mission of Oil Seed and Oil
Palm)
• MIDH (Mission for Integrated Development of
Horticulture Mission)
• NMAET (National Mission on Agriculture
Extension & Technology)
• National Food Security Mission (NFSM)

9. Main Features of Agri. Policies
1. Privatization of Agriculture.
2. Contract Farming.
3. Revision of Excise Duty
4. Technology
5. Improvement in Soil Fertility.

10. Share of agriculture in GCF (Gross
Capital Formation)
• According to Economic Survey 2014-15, the share of agriculture &
allied Sectors in total GCF was 7.9%. This number is made of Crops
(6.6%), Livestock (0.7%), Forestry & logging (0.1%) and Fishing
(0.5%).
• Rate of Gross Capital Formation is arrived as follows:
Rate of Capital Formation = (Investments /GDP) X 100.
• Importance of GCF: The high rate of GCF brings high GDP because
GCF is that component of GDP which helps in growth of GDP itself

11. Road Ahead
• India is expected to achieve the ambitious goal of doubling farm income by
2022.
• The agriculture sector in India is expected to grow in coming years due to
increased investments in agricultural infrastructure such as irrigation facilities,
warehousing and cold storage.
• India's gross value added (GVA) at basic prices increased by 5.7 per cent during
the April-June 2017 quarter, driven by agriculture and government spending.
• GVA from agriculture, forestry and fishing sector grew 2.5 per cent in this
quarter.
• The government of India targets to increase the average income of a farmer
household at current prices to Rs 219,724 (US$ 3,420.21) by 2022-23 from Rs
96,703 (US$ 1,505.27) in 2015-16.