Falling role of agriculture in rural economy - Chart Of The Day 29 July 2015 - Equitymaster

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Falling role of agriculture in rural economy
Jul 29, 2015

With agriculture still accounting for a sizeable 14% of the gross domestic product, the monsoons have a significant role to play in the economy, particularly as a large proportion of the population still resides in rural India. However as per a report by India Ratings, the rain gods may not exactly be the harbinger of good or bad times. This is because rural India or Bharat has undergone a huge transformation over the past decade.

On account of government sponsored employment programs such as MNREGA, the proportion of agricultural income has come down significantly in the past decade. In fact as per data from Central Statistical Organization(CSO), the share of agriculture in rural net domestic product fell to 39% in 2004-05 from 71% in financial year 1971. On the other hand, non-farm activities contributed 61% to rural net domestic product in 2004-05. India Ratings has estimated the share of agriculture to fall further to 30% in FY13. Therefore with other sources of income, the fortunes of rural India may not be totally dependent on monsoons.

Data Source:Wall Street Journal, CSO & India Ratings

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