This paper broadly estimates the growth rate of agricultural GDP that is based on factors such as capital formation, institutional credit and fertilizer consumption. Since these variables have a positive effect on GDP the null hypothesis is rejected. Further, this study also estimates the export performance of agriculture on agriculture GDP and tests whether the increasing expenditure on subsidies results in reduction of agriculture capital formation. For this purpose, this study uses log linear regression models at various levels. The author concludes that in order to strengthen trade promotion of agro-products, central and state governments have to involve practically rather than make policies.

The role of agriculture in economic development has been viewed as positive and supportive for any developing economy. Economic development is a prerequisite for a rapid structural transformation of the economy from predominant agricultural activities to a more complex modern industrial and service of agricultural sectors. The primary function is to provide sufficient low-priced food and manpower to the expanding industrial economy. Arthur Luis’s famous two-sector model is an outstanding example of a theory of development that emphasizes heavily on rapid industrial growth with an agrarian sector, by means of cheap food and surplus labor. Agriculture plays an indispensable part in any overall strategy of economic progress of developing countries like India. There are two kinds of world agriculture. The highly efficient agriculture of the developed countries with substantial productive capacity and high output per worker permits a very small number of farmers to feed the entire nation. Another is the inefficient and low productivity agriculture of developing countries where agriculture sector can barely sustain farm population, even at the minimum level of subsistence.

India has a great advantage and potential in the global economic scenario. India occupied the 6th rank in the world in terms of agricultural development. The share of Indian agriculture is 2.4% in the world. The arable land accounts for 11.8% of the world which is the second, USA being the first. The irrigated land of 57 million hectares (Mha) which comprised of 23.6% share, ranked first in the world. It was a contribution of Late Pandit Jawaharlal Nehru, the first Prime Minister of India, who created a significant agriculture base by developing the irrigation facilities in the country. The share of active population depending on agriculture is 19.3% in the world. In terms of total population also, it has 6.7% of the world population. The production of Groundnut has the share of 26.7% and rapeseed comprises of 20%, vegetables with 9.2% in the world, next to China. The share of Sugarcane consists of 21.4% area which is ranked second, next to Brazil. India has also attained the first rank in production of Pulses, Tea, and Jute and allied products with a share of 25.9%, 28.9%, and 52.6% of the world.

Economic Development of Agriculture in India, agriculture, development, population, economy, industrial, formation, production, complex, credit, factors, fertilizer, agroproducts, global, governments, Groundnut, manpower, Pandit, permits, prerequisite, rapeseed, scenario, strategy, transformation.