As India’s GDP contracts, only agri sector records growth

Srinagar: Even as the country’s GDP is all set to register a contraction for the April-June quarter on a year-to-year basis, agriculture sector alone is shining with a decent growth,.

The country’s GDP registered an annual decline, at minus 5.2%, last in 1979-80. But that year also recorded negative growth for agricultural GDP, at minus 12.8%. Even the previous GDP contractions of 0.3% in 1972-73, 3.7% in 1965-66, and 1.2% in 1957-58 were accompanied by farm output falling by 5%, 11% and 4.5% respectively.

The first quarter of 2020-21 (April-March) may turn out differently.

Most investment banks and rating agencies are predicting the economy to shrink this fiscal, with the Reserve Bank of India’s latest survey of professional forecasters pointing to a median estimate of minus 5.8%.

The farm sector, however, is set to post positive year-on-year growth. The first quarter agricultural GDP incorporates production from the rabi season, which ends with harvesting in April-June.

Crops, including fruits and vegetables, account for roughly 56% of gross value added from agriculture, with the rest coming from livestock products (29%) and forestry & fisheries (15%). The entire farm sector had an estimated 14.6% share of India’s GDP at constant prices in 2019-20.

The Agriculture Ministry has pegged output of wheat, chana and other rabi foodgrains this time at 151.72 million tonnes (mt), 5.6% higher than last year. While that of oilseeds (mainly mustard) fell 3.2% to 10.49 mt, most rabi horticultural crops – from onion, tomato, gourds, beans and jeera to mango, grapes and watermelon – have shown increases.

The crop sub-sector is likely to have grown by at least 4-5% in April-June on the back of recharged groundwater tables from very good rains and an extended winter that boosted yields. The performance of the other two sub-sectors may be mixed.

With inputs from FE