ECONOMICS PROJECT

Title: Changing role of primary sector in India since independence with special reference
to agricultural sector.

Points to be covered:
Meaning of Primary Sector.
Role and Importance of Primary Sector in the Economy.
Change in the contribution of agricultural sector in National Income since 1951.
Change in Occupational Structure in relation to agriculture since 1951.
Conclusion, Observation and Opinion.
________________

1. Meaning of Primary Sector :

The primary sector of the economy is the sector of an economy making direct use of natural
resource. This includes agriculture, forestry, fishing and mining. In contrast, the secondary produces
manufactured goods, and the tertiary sector produces services. The primary sector is usually most
important in less-developed countries, and typically less important in industrial countries.

The manufacturing industries that aggregate, pack, package, purify or process the raw materials
close to the primary producers are normally considered part of this sector, especially if the raw
material is unsuitable for sale or difficult to transport long distances.[1]
Farming, coal mining, forestry and logging, oil extraction, diamond extraction.

(At its peak the UK coal industry used to employ 1.2 million workers in this coal extraction. (1920s).)

2. Role and Importance of Primary Sector in the Economy :

Theodore Schultz in his Noble (Economics) acceptance speech in 1979 observed, Most of the
people in the world are poor... Most of the worlds poor people earn their living from
agriculture, so if we knew the economics of agriculture we would know much of the economics
of being poor (Shultz, 1979). India ranks second in worldwide farm output, it falls short in crop
yield per unit area of farms. States of India that lie on the Indo-Gangetic plain and the ones near
to any river are among the important agricultural regions of the country. India mainly exports
agricultural produce like rice, wheat, spices, and cereals. 10% of her trade income comes from
the export of these products. In the long run sustainable growth and development of a national
or regional economy depends on the volume of output produced by all sectors agriculture,
industry and the service sectors. Keeping this in mind, it becomes pivotal that the Indian
economy, more so Indian primary sector, needs to be modernized. Modernizing agriculture will
lead to increase in more yield of crop per unit area and increase share of its GDP. This creates a
chain of actions where,rural families will have an increased income, increasing their purchasing
power, which in turn expands the existing market for manufactured Role and Importance of
Primary Sector -Vagdevi H. S. & Kiranbabu P. economic planners and the government of that
country to plan, to govern and consistently take the economy towards a growing path. A steady
and reliable economic growth is vital for any country because it helps its citizens to have a
better standard of living and create enough surpluses that help in facing the adversities. To
understand the economy better scholars like Colin Clark (1940) and Fisher (1935) have divided
 the economy into three sectors - primary sector, secondary sector and tertiary sector. The
primary sector is an economic description, concerned with the extraction of raw materials. It
includes fishing, farming and mining.Amongst the primary sector, agriculture is the predominant
occupation and has the largest share in national income. Despite employing 51% of the
workforce, agriculture and allied activities produces just 15% of the national GDP, indicating a
poor usage of the available workforce and a failure of modernization of agriculture and other
activities allied to it.

***Primary Sector Contributes 18.20% of GDP***

Percentage of Primary Sector Contribution to GDP

17% 16%

2008-2009
2009-2010
2010-2011
16% 16%
2011-2012
2012-2013
2013-2014

16% 19%

3. Change in the contribution of agricultural sector in National Income since

1951:

Agriculture is the most important segment of all in the primary sector:

Agriculture in India is the major sector of its economy. Almost two-thirds of the total work-
force earns their livelihood though farming and other allied sectors like forestry, logging and
fishing which account 18% of the GDP. These sectors provide employment to 60% of the
countrys total population. About 43% of the countrys total geographical area is used for
agricultural purposes. After independence additional areas were brought under cultivation
and new methods, practices and techniques of irrigation and farming were introduced by the
government. The Green Revolution and Operation Flood in the country have made India
self sufficient in producing food grains and milk. Among other things, the government also
tried to decrease the dependence on monsoons. Better seeds, use of fertilizer, education of
farmers and provision of agricultural credit and subsidies are reasons for increase in
agricultural productivity.

Today, India is the major producer of milk, cashew nuts, coconuts, tea, ginger, turmeric and
black pepper in the whole world. It is the second largest producer of wheat, sugar, groundnut
and inland fish. It is the third largest producer of tobacco and rice. India accounts for 10 per
cent of the world fruit production with first rank in the production of banana and sapota
(Sapodilla).

Agriculture in India is the responsibility of the states rather than the central government. The
central government formulates policy and provides financial assistance to the states. States
like Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka and West
Bengal are major producers of food grains in India. Himachal Pradesh and Jammu and
Kashmir are famous for fruit production. Tea is produced in the high altitudes of Assam,
Darjeeling in West Bengal, Tripura, Ooty in Tamil Nadu, Himachal Pradesh and Kerala.
Kerala is also the largest producer of natural rubber and spices in India. Rajasthan is among
the major producers of edible oils in India and second largest producer of oil seeds.
Production of non-conventional items like moong (a type of lentil), soya beans and peanuts
are gradually gaining importance.

Even though there has been a steady decline in its share in the GDP, agriculture still remains
the largest economic sector and plays a crucial role in the socio-economic development of
the country.
4.
5. Conclusion:
The economic contribution of agriculture to Indias Gross
Domestic Product is steadily declining with the countrys broad based economic growth. Still,
agriculture is demographically the broadest economic sector and plays a significant role in the
overall socio-economic fabric of India. Agriculture plays a vital role in the Indian economy. Over
53% of the rural households depend on agriculture as their principal means of livelihood.
Agriculture, along with fisheries and forestry, accounts for one-third of the nations Gross
Domestic Product and is its single largest contributor.