Farm sector to outpace manufacturing: Survey

Vijay C Roy
Tribune News Service
Chandigarh, March 8

Agriculture is set to cushion the shock of the pandemic on the state’s economy in 2020-21 with a growth rate of 6.30 per cent. It is the only sector that has contributed positively to the overall Gross State Value Added (GSVA), according to the state’s economic survey. This indicates that agricultural activities for rabi harvesting and kharif sowing were largely unaffected by the lockdown, states the survey.

Gross value added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy.

On the contrary, the manufacturing sector was hit hard, but has picked up though mining still remains impacted. The construction and services sector were hit the hardest due to the pandemic-induced requirements of social distancing and minimising of personal interaction. Punjab though sheltered by the relatively resilient agriculture sector is expected to experience informal labour shocks in the services sector.

According to the survey, yet unlike the national economy, agriculture and allied activities in the state continues to contribute a large share in the state’s overall value added, exceeding the share of the industry. In 2019-20, agriculture and allied sector is expected to contribute a share of 28.68 per cent of the state’s GSVA.

Like national economy, the services sector has contributed the largest share in state’s gross value added. Over the past five years (2015-16 to 2019-20), the services sector in Punjab has contributed an average share of 46.5 per cent annually. Quick estimates for 2019-20 indicate an increase in the share of services sector in Punjab’s GSVA to 47.18 per cent in 2019-20.

The survey points out that since 2013-14 growth rate in the state was slower than the national average, Punjab’s GSDP grew at 3.98 per cent in 2019-20 (quick estimates) as compared to 5.76 per cent in 2018-19 (provisional). However in 2019-20 (quick estimates), the growth rate at all-India level and Punjab was more or less same at 4 per cent.

Despite the moderation in growth rates of the Centre over the past few years, Punjab’s economy is expected to contract in 2020-21.

However, the estimates for 2020-21 indicate a shift in this trend. The advance estimates for 2020-21 indicate that the contraction in the GSDP of Punjab is 1.3 per cent less as compared at all-India level. Punjab GSDP will witness a negative growth of 6.41 per cent compared to 7.75 per cent negative growth at national level.