Context: Given the  year 2019-20 saw India’s agriculture sector grow by 11.3 percent at current prices, more than the overall annual GDP increase of 7.9 percent, it calls for maximising possibilities of agriculture, due to its utility and resilience in tough times.

More on the news

  • This is the first time since 1980-81 when farm sector growth has exceeded that of non-farm by such a wide margin.
    • The current April-June quarter could see agricultural growth surpassing that of non-agriculture even at constant prices. 
    • If put simply, agriculture is back to being the economy’s mainstay and, indeed, the only sector growing amid a nationwide lockdown. 
  • It is indicated via Wheat procurement wherein Government agencies had bought 14.3 million tonnes (mt) of the new crop till the first week of May.
    • Farming activity being relatively unaffected is also captured by retail fertiliser sales rising 45 percent year-on-year in April. 

Agriculture and Inflation Control

  • Agriculture performing well is important from the standpoint of inflation control.
    • Adequate supply of food, feed and fibre, along with low oil prices, makes it easier for the Reserve Bank of India to pursue an accommodative monetary policy.
  • It also revives spending as farmers and rural labourers have higher marginal propensity to consume
  • But the farm sector cannot support economic growth beyond a point.
    • As per a  NABARD survey for 2016-17, only 43 per cent of the average monthly income of even the country’s estimated 10 crore-plus agricultural households came from cultivation and livestock rearing. 
    • The growth of the non-agriculture sector is important for farming families themselves, many of which have members deriving incomes from manufacturing and service sector jobs. 

Way Forward

  • The need of the hour is to focus upon the coming kharif cropping season, especially ensuring timely availability of seeds, fertilisers, pesticides, credit and other inputs. 
    • The government should seriously consider starting at the earliest special trains for labourers engaged in paddy transplantation and other agriculture-related operations. 
    • This is also the time to free farm produce trade by lifting all restrictions on stocking, domestic movement and exports. 


Marginal Propensity To Consume


It is defined as the proportion of an aggregate increase in pay that a consumer spends on the consumption of goods and services, as opposed to saving it. 


  • It is calculated as the change in consumption divided by the change in income. 
  • MPC is depicted by a consumption line, which is a sloped line created by plotting the change in consumption on the vertical Y axis and the change in income on the horizontal X axis.


Source: Investopedia


Image Source: Invest India