Agricultural Growth, Employment and Rural Poverty in India

Agriculture was the backbone of Indian economy in the past, and will be in future also. The pace of economic development of our country is significantly influenced by the pace of its agricultural development, as agriculture continues to be the predominant sector of the economy. It gives employment to more than sixty per cent of the labour force and also contributes 17.8 percent (2007-08) to Gross National Product (GDP). In an agrarian economy, transformation of traditional agriculture into scientific agriculture is a pre requisite for development. The government of India is trying to eradicate poverty in the country, particularly from rural areas, as rural poverty in India is massive. Most of the rural poor depend on rain-fed agriculture. The estimated results indicate an inverse relationship between rural poverty and agricultural performance and rural poverty and wage rates. This observation is found to be the same during, pre-reform period, post-reform and overall period. This suggests that improved agricultural wages will tend to reduce the incidence of poverty in India. This asserts the existence of trickle-down mechanism in India.