Agriculture and State’s gross domestic product

Agriculture is rapidly on the decline as its contribution in the state’s gross domestic product (GDP) has gone down significantly in the past few years.
In 2009-10, the contribution of agriculture and allied activities to the state’s economy came down to 24.92 per cent from 32.53 per cent in 2004-05. About 8 per cent fall in the share of this sector in the state’s economy in the past six fiscal years clearly indicates that the rural economy is in a bad shape. Its other consequence is a fall in the average net income of the farm community.
SS Johl, an eminent agricultural economist, said: “It is worrisome that there is a constant fall in the contribution of the agriculture to the state’s economy.” He alleged that the state government had failed to put its best foot forward to promote research and extension work in this sector.
“At least Rs 50 crore should have been earmarked for research work only”, he added. About 60-65 per cent of the people in the state live off the agriculture sector in the state. But their share in the economy is just 24.92 per cent, which means there is a lot of surplus manpower in this sector. The fall in the share has been mainly attributed to deteriorating soil health, a fall in water table and to some other factors.
Agriculture and allied activities, known as the primary sector, are in fact, growing at the slowest pace as compared to other sectors.
It grew at 1.06 per cent in 2009-10, 2.40 per cent in 2008-09, 3.89 per cent in 2007-08, at 2.89 per cent in 2006-07 and at less than 1 per cent in 2005-06. But the state grew at 7.84 per cent in 2009-10 if one is to go by figures available in the documents distributed at the time of the presentation of the Budget by Finance Minister Upinderjit Kaur.
However, the contribution of the agriculture and allied sectors to the state’s growth was just 1.06 per cent. Industrial sector grew at 11.99 per cent and the services sector at 9.10 per cent.
The other worrisome development is that there has been an insignificant growth in the contribution of the tertiary sector, also known as the services sector, in the state’s GDP. It increased to 43.53 per cent in 2009-10 from 42.69 per cent in 2004-05. Less than 1 per cent increase in the contribution of the services sector, which is a flourishing in most parts of the country, in five fiscal years reflects that the state’s is lagging behind in modernising its economy.