Structural transformation and agricultural productivity in India.

This chapter analyses the structural transformation of the Indian economy and its agriculture between 1961 and 2009. Although the agricultural share of gross domestic product (GDP) fell dramatically between the early 1960s and late 2000s, it remained the main employment sector throughout the period. This lack of convergence in the agricultural GDP and labour force shares of the economy is mirrored in the widening and accelerating divergence in average labour productivity between agricultural and non-agricultural sectors. The authors see the turning point in India's structural transformation, in which this productivity differential begins to narrow, as still in the distant future. Agricultural growth, and productivity growth in particular, will need to accelerate for India to generate sufficient new employment for its burgeoning rural population. Agricultural employment is especially important for India's poor and least educated workers, who are less able to migrate to non-farm sectors. The authors identify productivity improvement in the livestock sector as an underappreciated success story in India's agriculture.