Agricultural Sector
Overview
The agriculture sector, which accounts for 18% of the GDP and employs 41% of the workers, is the foundation of the Indian economy. It is a significant food supply for the nation and supports the export industry.
Major crops: Rice, wheat, pulses, cotton, sugarcane, and oilseeds are among India's top agricultural exports.
The Green Revolution: Starting in the 1960s, India's agricultural output increased during the Green Revolution. Although the Green Revolution was effective in boosting agricultural productivity, it also brought about a lot of environmental issues.
Land reforms: In an effort to better the lives of farmers, land reforms have been introduced in India. Redistribution of land, the elimination of the Zamindari system of land ownership, and the consolidation of landholdings are some examples of land reforms.
Several reasons, such as the following, are causing the agriculture industry to expand:
- Food is in more demand as a result of rising incomes and population growth.
- With programmes like the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) and the Pradhan Mantri Fasal Bima Yojana (PMFBY), the government's emphasis is on agricultural growth.
- The use of modern technology including better irrigation systems, fertilisers, and seeds.
Key Facts
Contribution to GDP: The agricultural sector contributes 18% to India's GDP.
Employment: The agricultural sector employs 41% of India's workforce.
Major crops: The major crops grown in India include rice, wheat, pulses, cotton, sugarcane, and oilseeds.
Production: India is the world's second-largest rice, wheat, and sugar producer.
Exports: India's agricultural exports are worth around $35 billion annually.
Imports: India's agricultural imports are worth around $25 billion annually.
Opportunities
Opportunities exist in the agriculture industry, including the following:
Food demand is rising in India as a result of the country's expanding population and rising standard of living.
India has a significant export market for agricultural goods.
Support from the government: The government offers a variety of programmes, including the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) and the Pradhan Mantri Fasal Bima Yojana (PMFBY), to help the agricultural industry.
Challenges
The agricultural industry encounters a variety of obstacles, such as:
Ineffective irrigation: About 60% of India's agricultural land is rain-fed, making it susceptible to floods and droughts.
Low productivity: When compared to other nations, India's agricultural output is underwhelming. Numerous reasons, such as inadequate irrigation, a lack of crop diversity, and antiquated agricultural methods, are to blame for this.
Low costs: It is difficult for farmers to profit since agricultural product prices are frequently low.
Analysis
|
Year |
Revenue (in crores) |
Revenue Growth (%) |
Operating Profit (in crores) |
Operating Profit Growth (%) |
|
|
2021-22 |
20,500 |
12.5 |
3,250 |
15 |
|
|
2020-21 |
18,000 |
10 |
2,800 |
12 |
|
|
2019-20 |
16,400 |
8 |
2,500 |
10 |
The revenue growth rate is a measure of how much revenue has increased year over year. The income of the agriculture industry has increased steadily over the past three years, with a growth rate of 12.5% in 2021–2022 vs 10% in 2020–2021. This shows that the agriculture industry has grown favourably over these years and produced more income.
The percentage increase in operating profit from one year to the next is shown by the operating profit growth rate. According to the statistics, the agriculture sector's operating profit has also grown steadily over the past three years, with a greater growth rate of 15% in 2021–22 than in 2020–21. This suggests that the industry's profitability has been increasing and that over these years, it has been able to produce bigger operating profits.
Overall, the data analysis indicates that India's agriculture industry has been growing in terms of both revenue and operational profit during the past three years. This encouraging trend suggests that the agriculture sector might be strong and prosperous at this moment.
Long-term growth in India's agriculture industry is expected.
- Food is in more demand as a result of rising incomes and population growth.
- With programmes like the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) and the Pradhan Mantri Fasal Bima Yojana (PMFBY), the government's emphasis on agricultural growth.
- the use of modern technology including better irrigation systems, fertilisers, and seeds.
- With a concentration on high-value commodities and animals, the industry is expected to grow more diversified.
- Sustainable agriculture will receive more attention, and more eco-friendly techniques will be used.
Analyst - Roshan Patel
info@smartinvestment.in
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