agro based industry in indian economy

Role of Agro-Based Industries In Indian Economy

Kamal Kumar2015A07M

Content

Indian EconomyGross Domestic Product (GDP) in IndiaShare of different sectors to GDPWhat are Agro IndustriesAgro Industries Vs Agro-Based industryRole and importance of agro industriesOver View of Agro-Based industriesCurrent status of agro-based industries in India Current status of agro-based industries in Haryana Opportunity & problemsReferences

About Indian Economy The economy of India is the seventh-

largest economy in the world measured by nominal GDP

Indian economy will continue to grow more than 7 per cent in 2016-17.

Indian economy is classified in three sectors — Agriculture and allied, Industry and Services.

Sector wise Indian GVA composition in 2014 are as follows : Agriculture (17.4%), Industry (24.2%) and Services (57.9%).

Niti Ayog, Government of India

Share of different sectors to GDP

1950-51

1960-61

1970-71

1980-81

1990-91

2000-01

2010-11

2011-12

2012-13

2013-14

0%10%20%30%40%50%60%70%80%90%

100%

51.88 47.65 41.66 35.69 29.53 22.26 14.59 14.37 13.95 13.94

16.19 20.09 23.62 25.66 27.6327.25

27.92 28.22 27.27 26.13

29.54 30.19 33.26 37.65 42.55 50.49 57.48 57.42 58.79 59.93

Agri-culture & Allied Services Industry Services

At 2004-05 series

Central Statistical Organisation (CSO)

0102030405060

Share of different sectors in GDP

Agri-culture & Al-lied Services

Agriculture

Industry

Mining and Quarrying

Manufacturing

Services

Financial Year

Perc

ent

Central Statistical Organisation (CSO)

Agriculture

Agricultural sector is the mainstay of Indian economy

Agriculture plays a vital role in India’s economy. 54.6% of the

population is engaged in agriculture and allied activities

(census 2011)

It contributes 17.4% to the country’s Gross Value Added

(current price 2014-15, 2011-12 series).

Total production of agriculture sector is US$366.92 billion.

India is 2nd larger producer of agriculture product

Ministry of Statistics and Programme Implementation, Govt. of India.

What are Agro Industries

The agro-industry should encompass not only the activities that consume agricultural raw materials, but also those that seek to provide input for modern agronomic practices.

Agriculture and industry are integral components of the

development process due to their mutual relationship as agriculture

provides inputs to the industry and output of the industry is used in

agriculture to expand production (Gupta, 1989).Union Development Commissioner for Small Scale Industries

FACTORS INFLUENCING growth of agro-based industries

Employment generator

Less capital investment

Social and economic development

Locally available raw material used in the production activities.

Types of Agro Industries

Based on the type of link the industry has with input and output of agriculture, agro-industries can be of two types-( 1 ) Processing industries (Agro-based

industry) (2) Input supply industries (Agro industries)

Agro Industries Vs Agro-Based industry

According to RBI the agencies supporting agriculture by way of designing and manufacturing of inputs generally termed as agro-industrials are some what different from those supported by agricultural products which are known as agro-based industries.

It has further classified agro-based industries into food processing, tobacco, textiles and textile products, leather and leather products, and paper and paper products industries.

Reserve Bank of India, "Agro-Industries in Maharashtra", Reserve Bank of India Bulletin, Vol.22, No.10, October 1969, P.1640

Agro-industries Agro-based industry

Agricultural implements

Seed industries, Pumpsets Fertilizer and Pesticide units

Food products & Beverages

Tobacco productsTextilesLeather ProductsPaper & Paper

Products

Role and Importance of agro industries

Agro industry can help stabilize and make agriculture more beneficial

Create employment opportunities both at the production and marketing stages

Helps in processing agricultural products such as field crops, tree crops, livestock and fisheries and converting them to edible and other usable forms

Strengthening industrial and agricultural linkagesIncrease the value of crops of poor farmers and thus

yield higher returns Expand marketing opportunitiesImprove livelihoods of people Extend shelf-life of commoditiesImprove palatability of commoditiesEnhance food securityOvercome seasonality and perishability constraints and

Major Agro-Based Industries

Manufacture of food products & Beverages

Manufacture of Tobacco products Manufacture of Textiles Manufacture of Leather Products Manufacture of Paper & Paper Products

Over View of Agro-Based industries(2014-15)

Category Food and processi

ngTextile Tobacco Leather Paper

Market Size (US$ billions ) 190 108 9.18 12 8

Share in GDP of

Manufacturing (%)

14 5 less than 1% less than

1%less than

1%

Exports (US$ billions ) 37.7 41.4 9.18 5.91 0.5

Employment(persons) 48 million 40 million 36 million 2.5million 2 million

www.ibef.org

http://www.ibef.org/

• The textile industry occupies a unique position in Indian economy

• It is one of the oldest and most widespread industry in India.

Textiles

TEXTILE INDUSTRY

Textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports

Its production ranges from raw materials such as cotton, jute, silk and wool to high value-added products like fabrics and garments to consumers.

The industry realized export earnings worth US$ 41.4 billion in 2014-15, with a growth of 5.4 per cent

The textile industry employs about 40 million workers The Indian textiles industry, currently estimated turnover around

US$ 108 billion.

www.ibef.org


Export of textile (Rs. In Crores)

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14020000400006000080000

100000120000140000160000180000200000

74289.6279836.9686196.09103700.1

131512.62144519.8

180400.5

www.indiastat.com

Export of textile products

Ready Made

Garments41%

Cotton Textiles

35%

Manmade Textiles16%

Wool and Woollen Textiles

1%Silk1%

Handloom Products1%

Carpets3%

Jute1%

Coir and Coir Manufac-tures1%

www.indiastat.com

FOOD PROCESSING INDUSTRY

India is one of the major food producing country in the world but accounts less than 1.5 percent of international food trade

It contributes around 14 per cent of manufacturing Gross Domestic Product

The estimated growth of this industry is 9-12 percent and on the basis of estimated GDP, the growth rate is 6-8 percent

13 per cent of India’s exports and Six per cent of total industrial investment

www.ibef.org & Minister of Food Processing Industries


share of food processing segments

Other Food Products;

24.5

Dairy Products; 5

Grain mill Products; 10.8beverage;

19.6

Meat, Fish, fruits,

Vegetable and oils;

40.2

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

14787

20427

3176235898 37798 36173

Export (US $ Million)

Minister of Food Processing Industries (MOFPI)

Exports of Food Processing Related Commodities from India

TOBACCO SECTOR ANALYSIS

One of the most profitable industries in the world India is the third-largest tobacco producer in the

world, with annual production of about 800 million kgs

Exports rose at a CAGR of 9.0 per cent, was US$ 918.9 million in 2014–15

In 2014–15, India exported 246 million kgs of tobacco and tobacco products. http://www.ibef.org

YearMillion

KilogramsRs. in Crore Rs./ kg

1974-75 74.9 80.35 10.721980-81 78.5 124.85 15.91985-86 64.4 138.98 21.721990-91 87.1 263 30.21995-96 87.1 447 51.322000-01 108 871 562005-06 167 1413 722010-11 224 3728 1662011-12 226 3767 1662012-13 228 3832 1682013-14 235 4849 2062014-15 246 5976 242

export of tobacco

www.indiastat.com http://www.ibef.org/exports/tobacco-industry-india

paper industry

The Indian paper industry accounts for about 3% of the world’s production of paper

The estimated turnover of the industry is INR 50,000 crore (USD 8 billion) approximately

It contribution to the exchequer is around INR 4,500 croreThe industry provides employment to more than 0.5 million

people directly and 1.5 million people indirectly.Exports of Paper & Paperboard in India decreased to 592.61

USD Million in 2015 from 1046.63 USD Million in 2013

http://ipma.co.in

Pulp & paper industry of india

tradingeconomics.com

Export of paper and paperboards

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

200

400

600

800

1000

1200

442.89486.69541.62588.85

836.9907.53969.9

1046.63

686.53592.61

US$ million

Leather industry

This sector is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the country.

With an Annual turnover of over US$ 11 billion, the export of leather and leather products touched US$ 5.9 billion in 2014-15, recording a cumulative annual growth rate of about 8.22% (5 years).

The leather industry is an employment intensive sector, providing job to about 2.5 million people

India is the second largest producer of footwear and leather garments in the world

iilfleatherfair.com

INDIA’S EXPORT OF LEATHER AND LEATHER PRODUCTS FOR FIVE YEARS (Value in Million $)

2009-10 2010-11

2011-12

2012-13

2013-14

2014-15

Finished Leather 807.19 673.37 627.95 841.13 1023.2

11276.9

5

Footwear 1489.35 1534.32

1507.59

1758.67

2077.27

2461.39

Leather Garments 345.34 426.17 428.62 425.04 572.54 684.58

Leather Goods 800.46 873.44 757.02 855.78 1088.0

91354.6

2Saddlery &

Harness 106.18 92.15 83.39 87.92 107.60 129.56

Total 3548.51 3599.46

3404.57

3968.54

4868.71

5912.97

% Growth 15.99% 1.44% -5.41% 16.57%

22.68%

21.44%Source: DGCI&S

GVA (GDP at factor cost Rupees in Crore) at series 2011-12

2011-12 Share% 2012-13

Share% 2013-14 %

share 2014-15 % share

Agriculture Sector 1,505,580 18.37 1,668,676 18.04 1,881,15

2 17.95 1964506 17.01

Industry Sector 2,713,467 33.11 2,954,565 31.93 3,219,94

2 30.73 3466996 30.02

Services Sector 3,976,498 48.52 4,628,810 50.03 5,376,04

5 51.31 6118738 52.97

Manufacturing 1,482,158 18.08 1,654,084 17.88 1,808,37

0 17.26 1984173 17.18

Food Products, Beverages and

Tobacco164,211 2.00 171,900 1.86 186,611 1.78 - -

Textiles, Apparel and Leather Products 149,695 1.83 197,622 2.14 222,320 2.12 - -

GVA at basic prices 8,195,546 9,252,051

10477140

13534413

Statisticstimes.com

Current status of agro-based industries in India

NO. OF UNITS AGRO-BASED INDUSTRIES IN INDIAWORKING CAPITAL OF AGRO-BASED INDUSTRIES IN

INDIA (Rs. in Lakhs) EMPLOYMENT IN AGRO-BASED INDUSTRIES IN INDIA

(persons) CATEGORY WISE NET INCOME OF AGRO-BASED

INDUSTRIES IN INDIA(Rs. in Lakhs)

Category 2006-07 2007-08 2008-09 2009-10

2010-11

2011-12

2012-13

2013-14


25,584

(52.59)

24,238

(51.56)

28,547

(53.29)

28,654

(52.40)

29,874

(52.21)

30,510

(51.86)

30,654

(52.40)

30,874

(52.21)

Manufacture of Tobacco products

2,952

(6.06)

2,541

(5.40)

3845

(7.17)

3785

(6.92)

4,136

(7.22)

4,157

(7.06)

4,285

(6.92)

4,136

(7.22)

Manufacture of Textiles

13,502

(27.25)

13,852

(29.47)

14,251

(26.60)

14,988

(27.40)

15,654

(27.36)

15,698

(26.68)

16,454

(27.40)

16,654

(27.36)

Manufacture of Leather Products

2,654

(5.45)

2,842

(6.04)

2,956

(5.51)

3,241

(5.92)

3,420

(5.97)

3,896

(6.62)

4,055

(5.92)

4,125

(5.97)

Manufacture of Paper & Paper Products

3954

(8.12)

3529

(7.50)

3966

(7.40)

4013

(7.33)

4124

(7.20)

4568

(7.76)

4213

(7.33)

4124

(7.20)

Total 48,646

(100.00)

47,002

(100.00)

53,565

(100.00)

54,681

(100.00)

57,208

(100.00)

58,829

(100.00)

59,661

(100.00)

57,208

(100.00)

CATEGORY-WISE NO. OF UNIT AGRO-BASED INDUSTRIES IN INDIA

Category 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14


16,54,874 (47.97)

16,85,978

(47.18) 17,02,142

(46.35) 17,54,23

1 (46.32)

17,02,142 (47.35)

17,84,231 (46.52)

17,01,290 (45.36)


1,85,244 (5.37)

1,64,100 (4.59)

1,78,265 (4.85)

1,65,988 (4.38)

1,78,200 (4.75)

1,65,988 (4.38)

2,13,101 (5.62)


11,69,899 (33.91)

12,54,620 (35.11)

12,45,231 (33.91)

12,87,568 (34.00)

12,35,231 (33.91)

12,46,768 (34.03)

12,82,147 (34.18)


1,86,522 (5.40)

1,94,009 (5.42)

2,47,588 (6.74)

2,55,855 (6.75)

2,57,588 (6.70)

2,55,809(6.73)

2,43,789 (6.50)


2,52,654 (7.32)

2,74,285 (7.62)

2,98,653 (8.13)

3,22,987 (8.52)

2,98,783 (8.22)

2,92,987 (8.32)

2,60,310 (8.24)

Total 34,49,193 (100.00)

35,72,992 (100.00)

36,71,879 (100.00)

37,86,629 (100.00)

36,90,822 (100.00)

37,45;234(100.00)

37,50,597 (100.00)

CATEGORY –WISE WORKING CAPITAL OF AGRO-BASED INDUSTRIES IN INDIA (Rs. in Lakhs)

www.indiastat.com

Category 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Manufacture of food products &

Beverages 12,52,467

(37.09) 12,61,703

(36.54) 13,94,528

(38.20) 14,02,528

(37.80) 14,86,854

(38.38) 14,34,548

(37.88) 14,96,678 (38.58)


4,86,297 (14.40)

4,99,874 (14.48)

5,26,500 (14.42)

5,32,810 (14.36)

5,64,910 (14.58)

5,12,823 (14.40)

5,83,934 (14.78)


12,55,138 (37.17)

12,64,975 (36.64)

12,88,410 (35.29)

13,30,800 (35.86)

13,29,133 (34.30)

13,34,834(35.06)

13,29,786 (34.90)


1,26,310 (3.74)

1,55,900 (4.51)

1,56,284 (4.28)

1,44,988 (3.90)

1,82,600 (4.71)

1,48,988 (4.20)

1,45,610 (4.51)

Manufacture of Paper & Paper

Products 2,55,843

(7.57) 2,69,840

(7.81) 2,84,389

(7.79) 2,99,200

(8.06) 3,10,524

(8.01) 3,09,200

(8.00) 3,11,533

(8.02)

Total 33,76,055 34,52,292 36,50,111 37,10,326 38,74,021 37,15,343 39,54,671

CATEGORY WISE NET INCOME OF AGRO-BASED INDUSTRIES IN INDIA (Rs. in Lakhs)

www.indiastat.com

Category 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14


12,65,122 (38.03)

13,45,623 (38.70)

13,75,844 (38.76)

13,98,570 (37.50)

14,10,102 (38.00)

14,28,573 (37.50)

14,30,532

(38.00)


4,75,698 (14.30)

4,23,567 (12.18)

5,10,254 (14.37)

5,35,644 (14.36)

5,65,987 (15.25)

5,75,694 (14.36)

5,71,937

(15.25)

Manufacture of Textiles 12,64,589 (38.01)

13,65,822 (39.29)

12,85,922 (36.23)

13,74,300(36.86)

13,25,809 (35.73)

13,04,863(34.99)

13,08,845

(35.73)


1,42,988 (4.22)

1,52,641 (4.39)

1,66,840 (4.70)

1,74,590 (4.68)

1,65,900 (4.47)

1,72,785 (4.68)

1,75,480

(4.47)


1,77,891 (5.34)

1,88,590 (5.42)

2,10,200 (5.92)

2,45,630 (6.58)

2,42,561 (6.53)

2,55,930 (6.58)

2,52,173

(6.53)

Total 33,26,288 (100.00)

34,76,243 (100.00)

35,49,060 (100.00)

37,28,734 (100.00)

37,10,359 (100.00)

37,28,734 (100.00)

37,10,359

(100.00)

CATEGORY–WISE EMPLOYMENT IN AGRO-BASED INDUSTRIES IN INDIA (persons)

www.indiastat.com

2007-08 2008

-09 2009-10 2010

-11 2011-12 2012

-13 2013-14

0200000400000600000800000

1000000120000014000001600000

Food products & Beverages

Tobacco products

Textiles Leather Products

Paper & Paper Products

Employment by Different Sectors

www.indiastat.com

Category wise no. of agro based industries in Haryana

2009-10 2010-11 2011-12 2012-13 2013-14

841

1118 1188 1149 1210

456643 650 608 631

74 126 115 108 10297160 126 144 163

18 17 17 18 21

Textile manufucturing Food processing manufucturingPaper manufucturing Leather industryTabacco manufucturing

www.indiastat.com

CATEGORY WISE NET VALUE ADDED OF AGRO-BASED INDUSTRIES IN haryana (Rs. in Lakhs)

2009-10 2010-11 2011-12 2012-13 2013-140

100000

200000

300000

400000

500000

600000

CATEGORY–WISE EMPLOYMENT IN AGRO-BASED INDUSTRIES IN HARYANa (no.)

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14020000400006000080000

100000120000140000160000

Textile manufucturing Food manufucturingLeather industry Paper manufucturingTabacco manufucturing

CATEGORY–WISE EMPLOYMENT IN AGRO-BASED INDUSTRIES IN HARYANa (no.)

Textile

manufucturing

Food manufuctur

ingLeather industry

Paper manufuctur

ing

Tabacco manufuctur

ing

2008-09 108072 47982 15585 6581 545

2009-10 140116 39811 19243 6054 367

2010-11 116526 44760 21610 6088 337

2011-12 128662 37051 21072 5640 513

2012-13 129484 48818 21201 5016 306

2013-14 139232 41878 21179 5519 759

Impact of Agro-based Industries on Incomes of Farmers

Size of the land holding (in acres)

No. of Households

Average income per household in 2006-07 (Rs.)

Average income per house hold in 2010-11 (Rs.)

Increase in average income per house hold by 2010-11 over 2006-07

Less than 5

13 65880 87840 21690(33.33)

5-10 12 148750 187000 38250(25.11)10-15 08 180000 240000 60000(33.3)15-20 11 248000 320000 72900(29.03)20-25 06 294000 378000 84000(28.57)25-30 10 394800 535800 141000(35.71)Total 60 1331430 1748640 417210(34.34)

Shejal S. S., “Agro-based Industries and Rural Development” , IJSR

Current status of processing

Item Production Rank % ProcessingMilk 110 million tonnes 1st 15

Livestock 485 million 1st 1

Fruits and Vegetables

150 million tonnes 2nd 2.2

Food grains 252.68 million tonnes

3rd 2

Fisheries. 10.1 million tonnes 3rd 26

Eggs 45,200 million 5th 1

Poultry 489 million 9th 6

A Study on Development Trends of Food Processing Sector in India

2014-15

opportunity

There is a tremendous opportunity for growth in the industry, only about 2% of agricultural production currently being processed

The food processing industry ranked 5th largest sector in terms of production, consumption, export and expected growth in India

problems

Agro- processing industry has been concentrated in the un-organized sector with low science and technology and little or no standardization and grading.

Inadequacy and suitability of required raw material on one hand and the seasonal nature of the operations of this sector

Wastage in the handling during post harvest and in marketing

Short period of raw material availability and excessive costs of raw material

Continue

Non- availability of processing varieties of fruits and vegetables

Processed/ packed food products have been considered luxury items(subjected to high tax)

A very low level of investment in agriculture sectorLacking vertical and horizontal, backward and forward

linkages among the farmers, processors and R&D organizations

ConclusionIf rural development has to gain strength then

economic and social life of the rural , comprising small and marginal farmer , land less labourers , tenants and other weaker sections must be improved through providing them with subsidiary occupations

The agro industry offer a wide and reliable field of promotional occupation , diversification in villages and broadening the base of economic operation through supplementary occupations.

referencesPlanning Commission, Government of IndiaDirectorate of Economics & Statistics Central Statistical Organisation (CSO)Ministry of Statistics and Programme Implementation, Govt. of

IndiaReserve Bank of India, "Agro-Industries in Maharashtra",

Reserve Bank of India Bulletin, Vol.22, No.10, October 1969, P.1640

Ministry of Textileswww.indiastat.comwww.iilfleatherfair.comwww.ipma.co.inShejal S. S., “Agro-based Industries and Rural Development” ,

IJSR, Volume : 2 | Issue : 3 | Mar 2013 • ISSN No 2277 - 8179

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agro based industry in indian economy

Economy & Finance