The direct contribution of the agriculture sector to national economy is reflected by its
share in total GDP, its foreign exchange earnings, and its role in supplying savings and
labor to other sectors. Agriculture and allied sectors like forestry and fishing accounted
for 18.5 percent of total Indian Gross Domestic Product (GDP) in 2005-06 (at 1999-2000
constant prices) and employed about 58 percent of the country's workforce (CSO, 2007).
It accounted for 10.95 percent of India’s exports in 2005-06 (GoI, 2007) and about 46
percent of India's geographical area is used for agricultural activity.
There has been a structural transformation in the Indian economy during the past few
decades. The composition of Gross Domestic Product at 1993-94 constant prices reveals
that the share of agriculture including forestry and fishing has declined as growth in
industrial and services sectors far outpaced agricultural sector (Figure 1). The share of
mining, manufacturing, electricity and construction sector has increased from 21.6
percent in 1970-71 to 27 percent in 2004-05 and services sector has increased
significantly from 32 percent to 52.4 percent during the same period. Despite a steady
decline of its share in the GDP, agriculture is still an important sector and plays a
significant role in the overall socio-economic development of the country. Therefore,
fostering rapid, sustained and broad-based growth in agriculture remains key priority for
Consistent with the trends of economic development at national level, role of agricultural
sector in the state economies is also changing rapidly. The share of agriculture in Gross
State Domestic Product (GSDP) has declined significantly during the last two decades. In
some States, such as Bihar, Punjab, Uttar Pradesh, Haryana, Rajasthan, and Orissa, the
sector today contributes more than one-quarter of GSDP, while in some... [continues]
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