Agriculture is the mainstay of the Indian economy because of its high share in employment and livelihood creation. It supports more than half a billion people providing employment to 52 per cent of the workforce. Its contribution to the nation’s GDP is about 18.5 per cent in 2006-07. It is also an important source of raw material and demand for many industrial products, particularly fertilizers, pesticides, agricultural implements and a variety of consumer goods.

India’s total geographical area is 328.7 million hectares, of which 141 million hectares is the net sown area, while 190 million hectares is the gross cropped area. The net irrigated area is 57 million hectares with a cropping intensity of 134 per cent. The total irrigation potential in the country has increased from 81.1 million ha in 1991- 92 to 102.8 million ha in 2006-07.

Productivity increase in agriculture is also considerably dependent on capital formation both from the public and private sectors. Gross capital formation (GCF) in agriculture as a proportion to the total capital formation has shown a continuous decline. GCF in agriculture relative to GDP in this sector has, however, shown an improvement from 9.6 per cent in 2000-01 to 12.5 per cent in 2006- 07.

The overall production of foodgrains was estimated at 217.3 million tonnes in 2006-07. Between 1950-51 and 2006-07, production of foodgrains increased at an average annual rate of 2.5 per cent compared to the growth of population which averaged 2.1 per cent during this period. As a result, India almost became self-sufficient in foodgrains and there were hardly any imports during 1976-77 to 2005-06, except occasionally.

The increase in foodgrain production in 2006-07 was largely because of higher production of wheat by 6.5 million tonnes (9.3 per cent) and of pulses by 0.8 million tonnes (6 per cent). There was a decline in production of oilseeds (3.7 million tonnes or 13 per cent) compared to the production in 2005-06.

The production of non-food crops, particularly sugarcane, cotton and jute (including roselle), in 2006-07, however, exceeded both the targets and the levels achieved in the previous year.

During the year 2006-07 (up to 30 September 2006), the value of agricultural exports was worth Rs 28,157.52 crore as compared to Rs 21673.25 crore during April-September 2005. The share of agricultural exports in total export was more than 10 per cent during April-September 2006. Agricultural imports registered a decline during April-September, 2005. The share of agricultural imports in India’s total imports showed a decline from 3.70 per cent to 2.88 per cent during the corresponding period.

India is the third largest producer and consumer of fertilizers in the world after China and the USA, and contributes about 11.4 and 11.9 per cent to the total world production/consumption of NPK nutrients respectively.Per hectare consumption of fertilizers has increased from 69.8 kg in 1991-92 to 113.3 kg in 2006-07 at an average rate of 3.3 per cent.

The rapid growth of agriculture is essential not only for self-reliance but also for meeting the food and nutritional security of the people, to bring about equitable distribution of income and wealth in rural areas as well as to reduce poverty and improve the quality of life. Growth in agriculture has a maximum cascading impact on other sectors, leading to the spread of benefits over the entire economy and the largest segment of population.