Assocham says Agri and Allied Sectors’ Share in GDP fell by 4.5 % between 2004 and 2010

New Delhi: Despite record food grain production during the course of past few years, the share of agriculture and allied sectors to India’s gross domestic product (GDP) declined by over 4.5 per cent between 2004-05 and 2010-11, while the share of services in the GDP has increased by over 4.6 per cent during the same period, apex industry body ASSOCHAM said today.

Besides, share of agriculture and allied sectors in the gross state domestic product (GSDP) of top 19 states in India declined significantly during the aforesaid five year period, thereby registering a fall ranging between about two per cent to about 12 per cent in the GSDP, according to a sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

While the industrial sector saw a paltry increase of 0.5 per cent, the mining and quarrying sector marginally dipped by 0.6 per cent across India during the aforesaid period, according to the ASSOCHAM analysis.

The industry sector in Punjab saw a surge of about 6.27 per cent, followed by Uttarakhand where the industry sector grew by about 6.13 per cent. Andhra Pradesh (one per cent), Bihar (three per cent), Chhattisgarh (less than one per cent), Gujarat (three per cent), Himachal Pradesh (two per cent), Madhya Pradesh (three per cent), Maharashtra (less than one per cent), Odisha (two per cent) and Uttar Pradesh (one per cent) are other states that saw marginal growth in industrial sector.

“Jharkhand is the only state across top 20 states in India to have witnessed a surge of over three per cent and about 11 per cent in the share of agriculture-allied activities and services sector respectively in its GSDP,” said Mr D.S. Rawat, national secretary general of ASSOCHAM while releasing the findings of the chamber’s analysis. “But the industrial sector in the state saw maximum decline of about 14 per cent during the same period.”

Share of agri and allied sectors in the GSDP has fallen drastically in Bihar (12% fall), Punjab (nine per cent fall), Uttar Pradesh (seven per cent), Haryana (six per cent), Madhya Pradesh (five per cent), West Bengal (six per cent) and Odisha (six per cent) as these states being the major agriculture producing states in India have registered a drop ranging between 5-12 per cent, highlights the ASSOCHAM analysis.

Assam (three per cent), Haryana (three per cent), Jammu and Kashmir (two per cent), Karnataka (one per cent), Kerala (two per cent), West Bengal (over one per cent) and Tamil Nadu (over four per cent) are the states that saw a decline in the growth of industrial sector.

Besides, services sector’s share in the GSDP significantly increased in Jharkhand (11 per cent), Kerala (over nine per cent), Haryana (about 10 per cent), Jammu and Kashmir (over nine per cent), Assam (over eight per cent), West Bengal (eight per cent), Bihar (nine per cent) and Tamil Nadu (eight per cent).

Expressing concern over decline in the share of agri-allied activities in the GSDP of almost all the states, Mr Rawat said “This calls for increased investments in research and development for speedy improvement in yield, besides, addressing infrastructure requirements in storage, communication, roads and market in the agriculture sector must also be prioritised.”

“The government’s decision to allow FDI in multi-brand retail would improve agriculture marketing, attracting significant investments in back-end supply chain and promote cluster farming in the long run considering that large number of farmers in India have small land holdings,” added Mr Rawat.

According to an ASSOCHAM-Yes Bank study titled ‘2nd Green Revolution: Agriculture to Agribusiness,’ the government must push the agricultural reforms including streamlining of norms to promote private sector investments in the sector.

“There is an urgent need to enhance agricultural productivity and develop strong forward-backward linkages along the entire agri-value chain considering rising demand of food products,” said the study. “Besides public-private partnership (PPP) mode across all stages of agri-value would also require an apt institutional and policy support from the government.”

“The complexity of agri supply chain and India’s huge and unorganized agri industry provides ample of opportunities to private sector in this regard,” said Mr Rawat.

An erratic monsoon is another significant reason behind this peril as about half of India’s arable land is dependent on monsoons even if all irrigation sources are fully developed. Besides, rigid regulations block modern technology and management innovations in agriculture.


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