How Agricultural Sector will transform the Indian economy? Issues, Govt schemes & Solutions

The agricultural sector is the backbone of the Indian economy, providing livelihood to a significant portion of the population and contributing substantially to the country’s GDP. Despite its critical importance, the sector faces numerous challenges that hinder its potential. This article delves into the economic impact of agriculture in India, the issues plaguing the sector, the government schemes aimed at addressing these challenges, and effective solutions for sustainable growth.

Economic Impact of Agriculture on India

Contribution to GDP

Agriculture contributes around 17-18% to India’s GDP, making it a crucial component of the economy. This sector not only supplies food and raw materials but also creates employment opportunities for a vast rural population.

Employment Generation

Approximately 50% of India’s workforce is employed in agriculture. This sector serves as a primary source of income for rural households, playing a vital role in poverty alleviation and rural development.

Foreign Exchange Earnings

India is a major exporter of agricultural products, such as rice, wheat, spices, and cotton. These exports contribute significantly to the country’s foreign exchange earnings, bolstering the economy.

Issues in the Agricultural Sector

Fragmented Land Holdings

One of the major issues is the fragmentation of land holdings. Small and fragmented farms lead to low productivity and inefficiency in farming operations.

Lack of Modern Technology

The adoption of modern technology and farming practices is limited, particularly among small and marginal farmers. This results in lower yields and reduced competitiveness in the global market.

Poor Infrastructure

Inadequate infrastructure, including irrigation facilities, storage, and transportation, hampers the efficiency of agricultural operations and leads to significant post-harvest losses.

Financial Constraints

Farmers often face difficulties in accessing credit and financial services. High indebtedness and reliance on informal credit sources are common issues that contribute to the agrarian crisis.

Climate Change

Climate change poses a significant threat to agriculture, with unpredictable weather patterns, extreme events, and increased pest and disease incidence affecting crop yields.

Government Schemes for Agricultural Development

Pradhan Mantri Fasal Bima Yojana (PMFBY)

Launched to provide crop insurance to farmers, PMFBY aims to protect them from the risks of crop failure due to natural calamities, pests, and diseases.

Pradhan Mantri Krishi Sinchai Yojana (PMKSY)

This scheme focuses on enhancing irrigation coverage and improving water use efficiency. It aims to ensure “Har Khet Ko Pani” (water to every field) and promote sustainable water conservation practices.

Soil Health Card Scheme

The Soil Health Card Scheme provides farmers with information on the nutrient status of their soil and recommendations for appropriate dosage of fertilizers. This helps in improving soil health and productivity.

National Agriculture Market (e-NAM)

e-NAM is an online trading platform that integrates agricultural markets across India. It aims to provide better price discovery and create a unified national market for agricultural commodities.

Kisan Credit Card (KCC) Scheme

The KCC scheme provides farmers with timely access to credit for their agricultural needs. It simplifies the process of availing loans and helps in meeting short-term credit requirements.

Effective Solutions for Sustainable Growth

Promoting Farm Mechanization

Encouraging the use of modern agricultural machinery and equipment can significantly improve productivity and reduce labor costs. Mechanization should be promoted through subsidies and training programs.

Enhancing Agricultural Research and Development

Investing in agricultural research and development (R&D) is crucial for developing high-yielding crop varieties, efficient farming techniques, and sustainable practices. Collaboration between research institutions and farmers can drive innovation.

Strengthening Supply Chain Infrastructure

Improving infrastructure for storage, transportation, and processing can minimize post-harvest losses and ensure better market access for farmers. Establishing cold chains and warehousing facilities is essential.

Facilitating Access to Finance

Enhancing access to affordable credit through formal financial institutions can reduce farmers’ dependence on informal sources. Expanding the coverage of schemes like Kisan Credit Card and promoting microfinance can help in this regard.

Adopting Climate-Resilient Practices

Promoting climate-resilient agricultural practices, such as conservation agriculture, agroforestry, and integrated pest management, can mitigate the impact of climate change on agriculture. Educating farmers about these practices is crucial.


The agricultural sector holds immense potential to drive India’s economic growth and development. Addressing the existing challenges through effective government schemes and adopting sustainable solutions can transform agriculture into a more productive and resilient sector. With concerted efforts from the government, private sector, and farmers, India can harness the full potential of its agricultural resources and achieve long-term food security and economic prosperity.


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