Indian Agricultural: Growth, Generation, Policy & Problem Indian Agricultural | Page 13

Pg.no. 12
13. Contribution to Capital Formation:
Underdeveloped and developing countries need huge amount of capital for its economic
development. In the initial stages of economic development, it is agriculture that constitutes a
significant source of capital formation.
Agriculture sector provides funds for capital formation in many ways as:
• agricultural taxation,
• export of agricultural products,
• collection of agricultural products at low prices by the government and selling it at higher
prices. This method is adopted by Russia and China,
•
labour in disguised unemployment, largely confined to agriculture, is viewed as a source of
investible surplus,
•
transfer of labour and capital from farm to non-farm activities etc.
14. Employment Opportunities for Rural People:
Agriculture provides employment opportunities for rural people on a large scale in underdeveloped
and developing countries. It is an important source of livelihood. Generally, landless workers and
marginal farmers are engaged in non-agricultural jobs like handicrafts, furniture, textiles, leather,
metal work, processing industries, and in other service sectors. These rural units fulfill merely local
demands. In India about 70.6% of total labour force depends upon agriculture.
15. Improving Rural Welfare:
It is time that rural economy depends on agriculture and allied occupations in an underdeveloped
country. The rising agricultural surplus caused by increasing agricultural production and productivity
tends to improve social welfare, particularly in rural areas. The living standard of rural masses rises
and they start consuming nutritious diet including eggs, milk, ghee and fruits. They lead a comfortable
life having all modern amenities a better house, motor-cycle, radio, television and use of better
clothes.
Ramesh Kumar P