Contribution of agricultural sector to GDP: Trend and Policy Implication ( Minhaj and Group)

EEIP presentation at IIPMB

1. Contribution of Agricultural Sector to GDP: Trend and Policy Implications SUBMITTED BY GROUP 8 Gowri Shankar.R Minhaj Ali Seetha Sowjanya Sohit Kumar Vigneshwaran.P    

2. Introduction The share of agriculture in the total GDP has steadily declined to a level of around 15% over the past two decades. More than 60 per cent of the workforce draws its sustenance from this sector one way or the other. The related phenomenon of “food inflation” which appears to have gripped all countries adds to the importance with which policy makers need to give agriculture as regards both short run as well as long run policies.

3. Contd., Perspectives influenced by short run developments as far as possible. Despite this , the growth rate fluctuates between nearly 7 per cent in period 4, and over 5 per cent in period 9, to 0.56 in period 3, and 0.41 percent in period 8. The available data also show how real public investment has steadily declined from period 1 to period 7, from about Rs . 105 billion to Rs . 37 billion respectively. A clear shift in public policy away from public investment in general and in particular in agriculture as a part of the new economic policy regime is quite clear.

4. Agriculture sector a must for GDP growth Kisaano ki Samriddhi”, the well-being of farmers is vital to the nation's prosperity. Kisan is the sentinel of our food security. The share of agriculture in employment was 48.9 per cent of the workforce. In other words, Agriculture is the principal source of livelihood for more than 58% of the population of this country. Agriculture is a state subject as per the constitutional list of VII schedule The concept of competitive Federalism to Competitive Sub-Federalism besides the smart city mission, agriculture development is needed at the grass root level.

5. GDP OF AGRICULTURE & ALLIED ACTIVITIES GDP of agriculture and allied sectors in India was recorded at USD244.74 billion in FY16. According to the advanced estimates of MOSPI, agriculture and allied sector recorded a CAGR rise of 6.64 per cent during FY07-16 Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Source:www.tradingeco.net

6. POLICIES & IMPLICATIONS

7. CONTINUED......

8. Trends (Missions for GDP increase) NMOOP (National Mission of Oil Seed and Oil Palm)   MIDH (Mission for Integrated Development of Horticulture Mission)   NMAET (National Mission on Agriculture Extension & Technology) National Food Security Mission (NFSM) 

9. Main Features of Agri. Policies Privatization of Agriculture. Contract Farming. Revision of Excise Duty Technology Improvement in Soil Fertility.

10. Share of agriculture in GCF (Gross Capital Formation) According to Economic Survey 2014-15, the share of agriculture & allied Sectors in total GCF was 7.9%. This number is made of Crops (6.6%), Livestock (0.7%), Forestry & logging (0.1%) and Fishing (0.5%). Rate of Gross Capital Formation is arrived as follows: Rate of Capital Formation = (Investments /GDP) X 100. Importance of GCF:  The high rate of GCF brings high GDP because GCF is that component of GDP which helps in growth of GDP itself

11. Road Ahead India is expected to achieve the ambitious goal of doubling farm income by 2022. The agriculture sector in India is expected to grow in coming years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. India's gross value added (GVA) at basic prices increased by 5.7 per cent during the April-June 2017 quarter, driven by agriculture and government spending. GVA from agriculture, forestry and fishing sector grew 2.5 per cent in this quarter. The government of India targets to increase the average income of a farmer household at current prices to Rs 219,724 (US$ 3,420.21) by 2022-23 from Rs 96,703 (US$ 1,505.27) in 2015-16.