Agri share in GDP hit 20% after 17 years: Economic Survey

Agriculture was the only sector to have clocked a positive growth at constant prices in 2020-21

By Shagun
Published: Friday 29 January 2021

The share of agriculture in gross domestic product (GDP) has reached almost 20 per cent for the first time in the last 17 years, making it the sole bright spot in GDP performance during 2020-21, according to the Economic Survey 2020-2021.

The resilience of the farming community in the face of adversities made agriculture the only sector to have clocked a positive growth of 3.4 per cent at constant prices in 2020-21, when other sectors slid.

The share of agriculture in GDP increased to 19.9 per cent in 2020-21 from 17.8 per cent in 2019-20. The last time the contribution of the agriculture sector in GDP was at 20 per cent was in 2003-04.

This was also the year when the sector clocked 9.5 per cent GDP growth, after the severe drought of 2002 when the growth rate was negative.

Following 2003-04, the share has remained between 17 and 19 per cent.

“The growth in GVA (gross value added) of agriculture and allied sectors has been fluctuating over time. However, during 2020-21, while the GVA for the entire economy contracted by 7.2 per cent, growth in GVA for agriculture maintained a positive growth of 3.4 per cent,” according to the survey.

The continuous supply of agricultural commodities, especially staples like rice, wheat, pulses and vegetables, also enabled food security.

In 2019-20 (according to fourth advance estimates), total food grain production (296.65 million tonnes) in the country was higher by 11.44 million tonnes than 2018-19.

It was also higher by 26.87 million tonnes than the previous five years’ (2014-15 to 2018-19) average production of 269.78 million tonnes.

The production also boosted allocation of food grains under the National Food Security Act (NFSA) that increased by 56 per cent in 2020-21, compared to 2019-20. The government allocated 943.53 lakh tonnes of food grains to states / Union territories till December 2020.

The survey also termed the new farm laws as a “remedy” and “not a malady” in a message to the farmer community opposing the laws.

“The three agricultural reform legislations are designed and intended primarily for the benefit of small and marginal farmers who constitute around 85 per cent of the total number of farmers and are the biggest sufferers of the regressive Agricultural Produce Market Committee regulated market regime. The newly introduced farm laws herald a new era of market freedom that can go a long way in the improvement of farmer welfare in India,” it said.

 The survey gave a note of various consultations and reports on the need for agricultural reforms.

“The reforms in the agricultural sector were more overdue than even the labour reforms as the existing laws kept the Indian farmer enslaved to the local Mandi (wholesale market) and their rent-seeking intermediaries,” it said.

It called for a paradigm shift in how agriculture was viewed, “from a rural livelihood sector to a modern business enterprise”.

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