Top Priorities in India for Future – Agriculture and Manufacturing Industry


Agriculture and Manufacturing – Both are growth drivers for any financial system. India, which has 70% populace living in rural areas with agriculture as the major stay of employment, is establishing objectives to improve the farmers through targeting to double the Agriculture earnings by the year 2022 and make it a high growth, particularly employable sector at par with manufacturing enterprise and the service sector.

A number of steps are being taken as much as achieving the objective. The prime minister of India, Shri Narendra Modi has reiterated the federal government’s goal that it wants to double farmers’ earnings by using 2022 and mentioned: “With ‘Beej Se Bazaar Tak’, we’re bringing best reforms within the agriculture sector.”


  • The transition of any nation from constructing to the developed nation is marked by using a move from the traditional sector to the modern sector.
  • Modernization was first initiated beneath the II 5 year Plan, famously known as the Nehru-Mahalanobis plan which fascinated by pushing up the heavy and basic goods industry to build local potential and scale back reliance on international products. This used to be an inspiration to be a coverage impetus to soak up the surplus workers in agriculture and counter disguised unemployment within the sector.

Key info concerning the state of Indian economic system

  • In India, agriculture contributes around 15% to the GDP and absorbs a bit greater than 49% of the labor drive. The manufacturing sector contributes around 19% to the GDP and occupies around 27% of the labor force.
  • International comparisons with China, South Korea, and Taiwan show the inactive development of Indian manufacturing sector due to the inflexible labor market
  • South East international locations have grown and emerged as the worldwide manufacturing hubs regardless of being at comparable GDP levels to India in the 1970s and 1980s as they took with building neighborhood manufacturing models through both public and private investment.

Agriculture resolution of Indian market and Manufacturing industry

Generates exchange Surplus: India’s share in world agriculture produce is 7.68%.  India has maintained a total trade surplus in agriculture due to the fact 2000s. The total trade (exports+ imports) has additionally grown. India’s relative comparative potential in agriculture is greater than that in manufacturing and commercial routine.

Generates greater investible surplus & financial savings: the rise in agriculture output and income can expand the market for the manufacturing sector. The migration of surplus labor from agriculture to manufacturing. This supports urbanization and industrialization as it did in England in the 19th century.

Supplier of raw material: Agriculture presents raw materials and wage goods for manufacturing industry like Sugar, fabrics, packaged food amongst others

Limitations in the Agriculture Sector

The profound contribution of agriculture to GDP despite 49% of the labor force in the sector suggests the inefficiencies within the sector as visible by way of:

Agriculture Bias: Farmers have no longer been capable to fully take advantage of the comparative abilities in agriculture exports because of overvalued exchange price, tariffs and quota restrictions on the trade of agriculture products.

The decline in per capita availability: despite a develop in yield, the per capita availability of agriculture output has fallen because of excessive diversion of inventory in silos and procurement and unencumbered used to be ill-timed. It has additionally put inflationary pressure in the time of draughts.

Learn how to make stronger Agriculture role

  • Technological reforms to toughen efficiency and to lower dependence on monsoon as although around 53% of agricultural land is rain-fed.
  • Rationalize food and fertilizer subsidies to bypass inefficient resource allocation in the direction of special plants like wheat and rice.

 Position of the manufacturing industry in India:

  • Manufacturing has the perfect multiplier effect (backward linkage) on economic development.
  • presents brand new inputs and implements for different sectors like fertilizers for agriculture.
  • Manufacturing has significant skills for job creation which can help in reducing poverty
  • The GVA via car industry is around 6% as of 2017. India is among the main auto manufacturers and can emerge as a global market leader in different segments. Automobile sector’s employment multiplier price of 5 which is indicative of its large employment redundancy capacity.

Constraints in the Indian manufacturing sector:

  1. Supply-side bottlenecks like power supply and demand mismatch, infrastructural bottlenecks commencing to potential underutilization;
  2. Demand facet constraints: India is a low earnings nation so gigantic revenue inequalities skew the demand for capital intensive goods
  3. The development of capital intensive industries due to extra export demand has both taken down the labor-intensive businesses and forced them to downsize to circumvent the powerful labor laws

The best way to reinforce Manufacturing enterprise role:

  1. The rising inequalities and unemployment can also be tackled through absorbing labor in manufacturing sector certainly in labor-intensive sectors like cloth. It could act as a driving force in India’s growth trajectory through capital accumulation and higher capacity utilization which currently is at 70%.
  2. Make in India needs each public and private funding to make India a manufacturing powerhouse to expand its export demand and GDP with the aid of growing new job possibilities.
  3. The value delivered by using MSMEs to manufacturing is greater than 30%. They require extra credit and better ease of doing business to enable higher economic inclusion, motivate entrepreneurship and gender equality.

Agriculture and Manufacturing: Equally most important

  • Agriculture and industry are complementary and not aggressive as a result of demand, production, and financial savings- investment linkages.
  • India desires to revamp its manufacturing sector and agriculture sector with the aid of making use of scientific methods of construction which can be economically viable and sensible, environmentally sustainable and globally aggressive to exploit the features from the trade, increase output &s employment and cut down inequalities.

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