Agro Predominance: A Challenge Author :  CA  A. K. Jain Agriculture has historically been the backbone of India’s economy, sustaining livelihoods and ensuring food security for centuries. Even today, it supports a large share of the population and remains central to rural life. However, the continued predominance of agriculture in employment, despite its declining contribution to national income, has emerged as a structural challenge for India’s economic development. When too many people depend on a low-productivity sector, economic transformation slows and growth potential remains underutilized. India’s development trajectory reflects a paradox. Agriculture contributes a relatively modest share to gross domestic product, yet employs a disproportionately large segment of the workforce. This imbalance indicates low labor productivity and disguised unemployment. A significant portion of the agricultural workforce is engaged in subsistence activities, generating limited surplus and low incomes. As a result, economic growth fails to translate into broad-based prosperity, particularly in rural areas. Historically, agriculture played a crucial role in India’s early development strategy. Post-independence policies prioritized food self-sufficiency and rural stability. The Green Revolution successfully increased food production and prevented famine, but it also reinforced an input-intensive, regionally concentrated model of agriculture. Over time, limited diversification and slow modernization constrained productivity growth. Structural reforms in industry and services advanced faster than agricultural transformation, widening sectoral disparities. Agro predominance creates multiple economic challenges. Low farm incomes reduce rural purchasing power, weakening aggregate demand and limiting market expansion for industrial goods and services. Fragmented landholdings and declining farm sizes restrict mechanization and economies of scale. Dependence on monsoons and volatile weather conditions increases income uncertainty, discouraging investment and innovation in rural areas. The dominance of agriculture in employment also strains public finances. Governments face constant pressure to support farmers through subsidies, loan waivers, and price interventions. While such measures provide short-term relief, they often distort incentives and absorb fiscal resources that could otherwise support long-term development. Excessive reliance on subsidies also delays necessary structural adjustments, keeping labor locked into low-productivity activities. Agro predominance affects labor mobility and human capital development. Limited non-farm employment opportunities in rural areas compel underemployed workers to remain in agriculture. Migration to urban centers, when it occurs, is often unplanned and distress-driven, leading to overcrowded cities and informal employment. Weak rural education and skill development systems further constrain mobility, perpetuating the cycle of low productivity. Environmental sustainability represents another dimension of the challenge. Intensive cultivation, excessive groundwater extraction, and chemical input use have degraded soil and water resources. Environmental stress reduces long-term agricultural viability and increases vulnerability to climate change. As agriculture remains the primary livelihood for millions, environmental degradation amplifies economic risk and rural distress. Despite these challenges, agriculture itself is not the problem; rather, it is the lack of structural transformation around it. Successful development experiences show that as economies grow, labor gradually shifts from agriculture to higher-productivity sectors such as manufacturing and services. In India, this transition has been slow and uneven. Manufacturing has not expanded sufficiently to absorb surplus rural labor, while services growth has been skill-intensive and urban-centric. Addressing agro predominance requires a multi-pronged strategy. Raising agricultural productivity is essential to increase incomes and release labor for other sectors. This includes promoting crop diversification, improving irrigation efficiency, strengthening extension services, and investing in post-harvest infrastructure. Market reforms that improve price discovery and reduce intermediation can enhance farm profitability. Equally important is accelerating non-farm employment generation. Expanding rural manufacturing, agro-processing, logistics, and services can create alternative livelihoods close to home. Skill development and education must align with emerging opportunities, enabling rural workers to transition smoothly into new roles. Planned urbanization and investment in small and medium towns can absorb migration more productively. Policy coherence is critical. Agricultural, industrial, and employment policies must be aligned to support structural transformation. Short-term relief measures should complement, not substitute, long-term reforms. Encouraging private investment in rural value chains can integrate farmers into broader markets and enhance resilience. In conclusion, agro predominance remains a significant challenge for India’s economic development because it reflects an incomplete structural transition. Sustainable growth requires moving labor from low-productivity agriculture to higher-value activities while ensuring that agriculture itself becomes more productive and resilient. By managing this transition thoughtfully, India can transform its rural economy, reduce inequality, and build a more balanced and dynamic growth model. ---------------------------------------------------- Author of this article, C.A. Anil K. Jain( caindia@hotmail.com ) is a highly acclaimed Chartered Accountant with over four decades of professional experience. He is widely recognized for his expertise in financial and asset planning, taxation, international investments, and business growth strategies. Beyond advisory work. He actively contributes to national economic discourse through policy representations to the Government of India, frequent appearances on television and radio, and extensive writing. He is also the author of the acclaimed books Bharat: The Development Dilemma and River Water Recharge Wells, reflecting his commitment to India’s economic development and sustainable water solutions.