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Agri per capita income to decline by -1.6%- FY 10:
K.Ramasubba Reddy
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With the revision in the base year to 2004-05, GDP at constant prices for the 2009-10 fiscal is estimated at Rs 44,53,000 crore. The CSO estimates that population would go up from 1.15 billion to 1.17 billion during 2009-10, registering an annual increase of 1.38 per cent. After taking inflation into account, per capita income at 2004-05 constant prices is estimated to grow by 5.4 per cent at Rs 33,540 this fiscal against Rs 31,821 during 2008-09. Last fiscal, it grew by 5 per cent. |
Production of foodgrain and oilseeds are expected to decline by 8 per cent and 5 per cent, respectively, in 2009-10 crop year, compared with the previous year. Sugarcane output is likely to dip 11.8 per cent. According to official estimates, foodgrains production in the kharif season would be down at 98.83 million tonnes, against the actual production of 117.70 million tonnes in the same season last year. “There could be a shortfall in agri-growth even in the next fiscal. The rabi crop, which was expected to compensate for lost kharif production in the ongoing fiscal, is also in for problems because of rise in temperature, which might kill its foreseen higher yield prospects,” Abhijit Sen said
Cotton production is expected to be stagnant. “Among the horticultural crops, production of fruits and vegetables is expected to increase by 2.5 per cent and 4.8 per cent respectively, during the year 2009-10,” it said.
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India’s farm sector has a share of about 16 per cent of the total GDP, but about 60 per cent of the population depends on agriculture for livelihood. The per capita income of those dependant on agriculture is expected to decline by -1.6% while the per capita income of those deriving income from non- agri activities is expected to increase in the range of 5% (Construction) to 8.5% (Financing, Insurance, Real Estate & Business Services)
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Mining has registered a big jump, growing at 8.7%. Gas production from the KG Basin and production of crude from Barmer fields account for this jump. The Sixth Pay Commission arrears that the government distributed this fiscal, pushed up the value added in community and social services. Contribution of exports to the economic expansion during 2009-10 is estimated to fall to 18.6 per cent from 23.5 per cent a year ago.
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The boost to the economy in 2009-10 comes mainly from higher consumption by both households and the government as investment demand continues to slacken with gross fixed capital formation slipping to 32.5% of GDP. Gross fixed capital formation is expected to grow by just 8.4% in 2009-10 compared to 12.7% a year ago. In addition to negative growth, agriculture’s share of the GDP has declined below the 15% mark for the first time.
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Annexure: Sectoral Growth Trends : |
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.
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| Average (Percentage ) |
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1950s@ |
1960s |
1970s |
1980s |
1990s* |
2000-01 to 07-08 |
08 - 09
QE |
09 -10
AE |
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 |
8.2 |
| Mining & Quarrying |
4.6 |
6.2 |
3.1 |
8.9 |
4.9 |
5.2 |
1.6 |
8.7 |
| Manufacturing |
5.8 |
5.9 |
4.3 |
5.7 |
6.5 |
7.7 |
3.2 |
8.9 |
Electricity, Gas &
Water Supply |
10.7 |
11.4 |
6.9 |
8.3 |
7.0 |
4.6 |
3.9 |
8.2 |
| 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 |
8.7 |
| Trade, Hotels, Transport and Communication |
5.0 |
5.4 |
4.8 |
5.9 |
8.0 |
10.7 |
7.6 |
8.3 |
| Financing, Insurance, Real Estate & Business Services |
3.1 |
3.2 |
4.3 |
8.4 |
7.7 |
8.8 |
10.1 |
9.9 |
| Community, Social & Personal Services |
3.5 |
5.2 |
4.1 |
5.8 |
6.9 |
5.6 |
13.9 |
8.2 |
| GDP at factor cost |
3.6 |
4.0 |
2.9 |
5.6 |
6.2 |
7.3 |
6.7 |
7.2 |
* 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. AE= Advance Estimates at 2004-05 prices
Source : Central Statistical Organisation, Government of India. |
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.
Performance of services sector in the Indian economy has been
exemplary. 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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Source: RBI: An Empirical Investigation of the
Inter-Sectoral Linkages in India-RBI Occational Papers, Summer 2009
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| KRSR/090210 |
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