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Indian Economic Policy

Notes Table 2 : Population and Agricultural Workers

(in million)
1951 2001

Total Population of India 361 1029
Total Working Population 140 (100) 401 (100)
Population employed on land of which 98 (70%) 235 (59%)
Cultivators 70 (50%) 128 (32%)
Agricultural Labourers 28 (20%) 107 (27%)

Source : Agricultural Statistics at a Glance (2007).
Data provided by the Census of India reveals that in absolute terms, agriculture provided
employment to 98 million persons in 1951; the number of people working on land (cultivators
and agricultural labourers) increased to 235 million in 2001. In terms of percentage, however,
people working on land came down from 70 to 59 during the five decades between 1951 and
2001.
The Tenth Plan (2002-07) estimates that the agricultural sector still provides employment to 57
per cent of India’s work force and is the single largest private sector occupation. It is, however,
really disturbing that the proportion of agricultural labourers has increased from 20 to 27 per
cent between 1951 and 2001 but that of cultivators registered a decline from 50 percent to 32
percent. This shows clearly the growing pauperisation of the rural peasantry.
(iii) Importance of Agriculture for Industrial Development : Indian agriculture has been the source
of supply of raw materials to our leading industries. Cotton and jute textile industries, sugar,
flour mills vanaspati and plantations-all these depend on agriculture directly. There are many
other industries which depend on agriculture in an indirect manner. Many of our small-scale
and cottage industries like handloom weaving, oil crushing, rice husking, etc., depend upon
agriculture for their raw materials-together they account for 50 per cent of income generated in
the manufacturing sector in India.
But then, in recent years, the significance of agriculture to industries is going down as many
new industries have come up which are not dependent on agriculture. Under the Five-Year
Plans, iron and steel industry, chemicals, machine tools and other engineering industries,
automobiles, information technology etc., have come up in a big way.
However, in recent years, the importance of food processing industries is being increasingly
recognised both for generation of income and for generation of employment.
(iv) Role of Agriculture in the Field of International Trade : Importance of Indian agriculture also
arises from the role it plays in India’s trade. Agricultural products-tea, sugar, oilseeds, tobacco,
spices, etc.-constituted the main items of exports of India. Broadly speaking, the proportion of
agricultural goods which were exported came to 50 per cent of our exports, and manufactures
with agricultural content (such goods as manufactured jute, cloth and sugar) contribute another
20 per cent or so; and the total comes to 70 per cent of India’s exports in 1950-51. But with
diversification of exports, more especially after the introduction of agricultural exports which
were 18.5% in 1990-91 rose to 20.3% in 1996-97 and thereafter indicated a continuous decline
and were of the order of only 10.6% in 2009-10.

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