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The XI Five Year Plan aims at 4% Agri GDP growth. But during FY 09 Agri GDP growth was just 1.6%. During FY 10 the growth is near zero at 0.2%. All other sectors are on high growth path is seen from the following table.
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While manufacturing grew 10.8 per cent (3.2 per cent), mining and quarrying grew 10.6 per cent (1.6 per cent). Agriculture, forestry and fishing recorded a near zero growth of 0.2 per cent (1.6 per cent). Contribution of exports to GDP at market prices slid to 20.6 per cent in 2009-10 from 23.5 per cent the previous year.
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Services sector actually decelerated, growing by 8.5 per cent in 2009-10 compared to 9.8 per cent in 2008-09. This came largely on the back of a sharp fall in the growth rate of the “community, social and personal services Growth in this category dropped from 13.9 per cent in 2008-09 to a mere 5.6 per cent in 2009-10. This deceleration possibly captures the waning statistical effect of the salary revisions of government employees, implemented in October 2008. In national income accounting, value addition by government employees is equated directly to their salaries.
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(Note: Increases in salariesof Govt employees do not ifso facto contribute to value addition)
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The growth rate in private final consumption expenditure (that constitutes the bulk of GDP) has actually fallen from 6.8 per cent to 4.3 per cent. However, recovery in gross capital formation from 4 to 7.2 per cent has compensated the growth rate. B S 010610
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| Sectoral Growth Trend Analysis |
Decade-wise analysis reveals that the GDP accelerated remarkably to 5.6 per cent during the 1980s from 2.9 per cent during the 1970s.
The pick-up in GDP growth was supported by all the sectors with a marked acceleration. |
| Sectoral Growth Trends – Average (Percentage) |
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1950s@ |
1960s |
1970s |
1980s |
1990s* |
2000-01 to 07-08 |
08 - 09
QE |
09 -10
RE |
Agriculture, forestry &
fishing |
2.7 |
2.5 |
1.3 |
4.4 |
3.8 |
2.9 |
1.6 |
0.2 |
| Industry |
5.7 |
6.5 |
3.6 |
6.1 |
6.2 |
7.9 |
3.9 |
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| Mining & Quarrying |
4.6 |
6.2 |
3.1 |
8.9 |
4.9 |
5.2 |
1.6 |
10.6 |
| Manufacturing |
5.8 |
5.9 |
4.3 |
5.7 |
6.5 |
7.7 |
3.2 |
10.8 |
Electricity, Gas &
Water Supply |
10.7 |
11.4 |
6.9 |
8.3 |
7.0 |
4.6 |
3.9 |
6.5 |
| Construction |
5.8 |
7.2 |
2.0 |
5.5 |
6.0 |
10.6 |
5.9 |
6.5 |
| Services |
4.0 |
4.8 |
4.4 |
6.4 |
7.6 |
8.8 |
9.8 |
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| Trade, Hotels, Transport and Communication |
5.0 |
5.4 |
4.8 |
5.9 |
8.0 |
10.7 |
7.6 |
9.3 |
| Financing, Insurance, Real Estate & Business Services |
3.1 |
3.2 |
4.3 |
8.4 |
7.7 |
8.8 |
10.1 |
9.7 |
| Community, Social & Personal Services |
3.5 |
5.2 |
4.1 |
5.8 |
6.9 |
5.6 |
13.9 |
5.6 |
| GDP at factor cost |
3.6 |
4.0 |
2.9 |
5.6 |
6.2 |
7.3 |
6.7 |
7.4 |
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*: Excluding the crisis year 1991-92.
@ : Average for the growth during the 1950s is the average of nine years, i.e., from 1951-52 to 1959-60. QE=Quick Estimates @ 2004-05 prices. &: Agri sector share in GDP, RE= Revised Estimates at 2004-05 prices
Source : Central Statistical Organisation, Government of India. |
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| Since the eighties, the growth trend of industrial and services sectors have moved upwards, while that of agriculture and allied activities has followed a downward trend. |
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| Performance of services sector has been on the increase. First, in contrast with agricultural and industrial sectors, except for the interregnum of the 1970s, the growth in services sector has trended upwards, accelerating from 4.0 per cent in 1950s to 8.8 per cent in 2000s (2000-01 to 2007-08). On the contrary, while the growth in primary sector remained volatile with no clear trend, growth in industrial sector in the 1980s and 1990s (6.1 per cent and 6.2 per cent, respectively) remained even lower than 6.5 per cent growth of the 1960s (3.6 per cent in 1970s). |
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| In respect of comparison of sectoral shares in GDP since the 1950s, a skewed pattern emerges wherein the relative share of agriculture is declining over time, with industry remaining nearly |
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| constant and services sector share rising in the GDP (Chart 1). Since the early 1950s, share of services sector in GDP exceeded that of the industrial sector, but the same remained smaller than that of the agricultural sector till the 1970s. |
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| As per the components of services sector, it is found that ‘community, social and personal services’ (CSPS) and ‘trade, hotel, transport & communication’ (THTC) had almost the same share in GDP during the period from 1950-51 to 1954-55 (Chart 2). In 1955- 56, THTC overtook the CSPS sector. The sector ‘financing, insurance, |
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| real estate and business services’ (FIRB) has seen its share expanding sharply since the early 1980s and in 2006-07, its share in GDP has become almost equal to that of the CSPS. Nationalisation of banks and introduction of post office deposits along with the gradual liberalisation in the insurance sector may have contributed to financial deepening leading to a rise in the share of FIRB in the overall GDP |
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Why Agri GDP growth is declining? Please see the forthcoming Article with the above title. KRSR
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In Marketing produce, Farmers have Always been the Losers
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| After harvest, the wheat is compulsorily procured by FCI from the traditional wheat-growing States such as Punjab and Haryana at MSP, even if the market price at the time of procurement is much higher than at the time of sowing, before which MSPs are announced. This is done by coercive executive orders disallowing private traders to buy wheat from farmers even if those traders are offering the market price. Agri output did not grow much more in FY 10 than in the previous year; nonetheless the value of their output was up 11.8 per cent. The extent of divergence could just as well serve as a rough proxy for the degree of price rise in that sector. But for an average agricultural producer, high retail prices for produce did not translate into more money as the stocks held by the average farmer are rather insignificant, the rise in prices much after the harvest does not flow back to him. In marketing their produce, farmers have always been the losers. BL 270510 |
| Proposal to index NREGA wages, reduce working hours |
| A working group on NREGA asks for indexing wages to the farm wage index, besides reducing work to 7 hours. These are warnings against the scheme's potential to end existing rural enterprise and prevent new ones. That is a kind of denial to the rural poor of a real chance to be owners and masters of small village economies that can ultimately transform the nation. NREGA,more or less, B S May 30, 2010 |
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| NOTE: This move is sure to increase agri wages without any value addition thus leading to increase in cost of cultivation without any proportionate increase in the prices of agri produce. Once again, the farmers are the losers. |
| Stimulus impact: India's deficit up at Rs 4.12 lakh crore 25% FY10 |
As the government cut duties and stepped up public expenditure, its fiscal deficit rose by 24.89 per cent to Rs 4,12,307 crore in 2009-10 compared to the year ago period. Fiscal deficit had stood at Rs 3,30,114 crore during 2008-09. |
| Initiating the stimulus measures to spur the slowing down economy after global financial crisis deepened, the government cut excise duty by four per cent in December, 2008. It again cut excise duty as well as service tax by two per cent in February, 2009. |
| So higher impact of stimulus measures in the form of tax cuts came in 2009-10, which resulted in widening of fiscal deficit. Similarly, Plan expenditure was stepped up to give a boost to the economy, further widening the gap between expenditure and receipts of the government. |
| As a result, while tax revenue rose by just 2.61 per cent to Rs 4.59 lakh crore in 2009-10 compared to a year ago period, Plan expenditure increased by 9.71 per cent to Rs 3.02 lakh crore. Adding non-tax revenue, the government's total receipts rose to Rs 6.06 lakh crore in 2009-10, while together with non-Plan expenditure, the total expenses increased to much higher level of Rs 10.18 lakh crore. As such, fiscal deficit widened to Rs 4,12,307 crore. PTI 010610 |
| The value of output from livestock and fisheries sectors 27%: |
at current prices was about Rs. 310891.00 crore during 2008-09 according to the estimated Central Stastical Organisation. This works out to about 27% of the value of output of Rs. 1158400.00 crore from the entire agricultural and allied sector. The Total export earning from livestock, poultry and marine products stood at Rs. 18664.44 crore during 2008-09 (Rs. 10056.50 crore from livestock and poultry and Rs. 8607.94 crore from marine products).
Krsr/020610 |
