Q) The highest engaging sector of the Indian economy does not contribute to the GDP at the same level. In this context, critically examine the issues plaguing the agricultural sector in India and steps needed to reform it.

Why this Question

Important part of GS paper III. 

Key Demand of the Question:

Significance of agricultural sector in India, issues in it and measures to reform it.


Critically examine- Look in close detail and establish the key facts and important issues surrounding the topic. Try and offer reasons as to why the facts and issues identified are most important, as well as explain the different ways they could be construed.


Give a brief overview of the agricultural sector in India.


In the first part, highlight the issues in the agricultural sector. 

In the next part, highlight the  measures needed to reform the agricultural sector. 


Conclude with a way forward.

Model Answer

For 58% of the total population of India, agriculture and allied activities are the primary income source. This makes it the largest employing sector of the Indian economy. On the other hand, this sector contributes only 16.5 % to India’s Gross Value Added (GVA) in 2018-19. This outlines certain issues that have limited the productivity of the agriculture sector in India. 

Issues in the Indian Agriculture 

  1. Rain Fed- even after so many years of independence, a large portion of India’s agriculture is dependent on monsoon for irrigation and lacks modern equipment. 
  2. Lack of modernization- the Indian agriculture sector lacks modern tools of ploughing, harvesting as well as irrigation.
  3. Land Size- The number of operational holdings has been rising (increased from 138.3 million to about 146 million) owing to increasing population. This has led to falling average landholdings’ size of farmers, from 1.2 ha to about 1.08 ha. In addition the area under agriculture has consistently decreased due to increasing urbanization. 
  4. Lack of credit- most of the farmers in India are small and marginal farmers who depend on the revenue generated in one cropping season to get inputs for the next cropping season. This leaves little with them as profit.
  5. Poor Infrastructure- Poor access to reliable and timely market information for the farmers, absence of supply & demand forecasting, poorly structured and inefficient supply chains, inadequate cold storage facilities and shortage of proper food processing units, large intermediation between the farmers and the consumers are some of the major causes for the losses.
  6. Low Yield- India’s farm yield is 30-50% lower than that of developed nations. Average farm size, poor infrastructure, low use of farm technologies and best farming techniques, decrease of soil fertility due to over fertilization and sustained pesticide use, are leading contributors to low agricultural productivity.
  7. Low Investment- The Gross Capital Formation (GCF) in agriculture as a percentage of the total GCF in the economy has fallen from 8.5 % in Financial Year 2011-12 to 6.5 % in Financial Year 2018-19. This is because the share of private investment has shrunk. Though public investment has gone up it is not sufficient to check the slide or keep the GCF at FY12 level.

Measures to Reform the Agriculture 

  1. Redesigning the public procurement and distribution system to broaden the range of crops, including more high-value-added and less water-intensive crops.
  2. Providing adequate formal credit mechanisms to farmers to elevate their social and economic status.
  3. Development of modern irrigation techniques to reduce the dependence on monsoon. 
  4. Using sustainable techniques in agriculture like crop rotation, mixed cropping, etc.
  5. Promotion of collective farming to pooling of resources to invest in modern farming techniques and machinery. 
  6. Providing other means of employment to reduce the dependence on agriculture sector.
  7. Building modern infrastructure to mitigate the supply chain challenges. 

Currently, India is the second largest agriculture producer in the world. Mitigating the above challenges can do phenomenal bring phenomenal changes in the Indian economy and the lives of the farmers. To ensure the achievement of doubling farmers’ income by 2022, the government has to take necessary steps  to reform the agriculture sector.