Agriculture: Share in GDP
During 2009-10, agricultural sector contributed to approximately 14.6 per cent of India’s GDP (at 2004-05 prices). The share of Agriculture and Allied Sectors in GDP is estimated to be 14.2 % in 2010-11. This is evident from the following chart:
The above chart shows the share of Agriculture and Allied Sectors which include Forestry and Fishing. The share of Only Agriculture is has been 13.9 in 2009, 13.2 in 2008-09 and 12.3 in 2009-10. In 2009-10, the share of Agriculture, Forestry & Logging and Fishing is shown in the following chart:
The growth in share of agriculture in GDP as per the final figures of 2008-09 was -0.1%. It was 0.4% in 2009-10 and is estimated to be 5.4% in 2010-11.
In terms of composition, out of a total share of 14.6 per cent of the GDP in 2009-10 for agriculture and allied sectors, agriculture alone accounted for 12.3 per cent followed by forestry and logging at 1.5 per cent and fisheries at 0.8 per cent.
During the period 2004-05 to 2007-08, the GDP for agriculture and allied sectors had increased from Rs. 5, 65,426 crore to Rs. 6,55,080 crore, at constant 2004-05 prices; thereafter it stagnated at this level for two years (2008-09 to 2009-10). In 2009-10, it accounted for 14.6 per cent of the GDP compared to 15.7 per cent in 2008-09 and 19.0 per cent in 2004-05. Its share in GDP has thus declined rapidly in the recent past.
The Economic Survey 2010-11 says that the overall GDP has grown by an average of 8.62 per cent during 2004-05 to 2010-11, agricultural sector GDP has increased by only 3.46 per cent during the same period. The role of the agriculture sector, however, remains critical as it accounts for about 58 per cent of employment in the country (as per 2001 census).
Moreover, this sector is a supplier of food, fodder, and raw materials for a vast segment of industry. Hence the growth of Indian agriculture can be considered a necessary condition for ‘inclusive growth’. More recently, the rural sector (including agriculture) is being seen as a potential source of domestic demand, a recognition that is even shaping the marketing strategies of entrepreneurs wishing to widen the demand for goods and services.
Agriculture during the 11th Plan Period
During the first three years of the current Five Year Plan, the agriculture sector (including allied activities) recorded an average growth of 2.03 per cent against the Plan target of 4 per cent per annum. In the first year, 2007-08, of the current Plan the agriculture sector had achieved an impressive growth of 5.8 per cent. However, this high growth could not be maintained in the following two years and agriculture-sector growth fell into the negative zone of – 0.1 per cent in 2008-09, although this was a year of a record 234.47 million tonnes food production.
Why this Decline?
The decline in growth of agricultural GDP was primarily due to the fall in the production of agricultural crops such as oilseeds, cotton, jute and mesta, and sugarcane. In 2009-10, despite experiencing the worst south-west monsoon since 1972 and subsequent significant fall in kharif food grain production, the growth marginally recovered to 0.4 per cent primarily due to a good rabi crop.
Why High Expectations this year?
The Economic Survey is optimistic in the current year because with a relatively good monsoon, the agriculture-sector is expected to grow at 5.4 per cent as per the 2010-11 advance estimates. The agriculture sector growth in the first four years of the Plan is estimated at 2.87 per cent. In order to achieve the Plan target of average 4 per cent per year, the agriculture sector needs to grow at 8.5 per cent during 2011-12.