Why agriculture share in GDP is dropping

Share of agriculture in the Gross Domestic Product (GDP) has dropped by nearly 5 percent in the last eight years to 14 percent, due to higher growth in other sectors.

Agriculture & Allied sectors which used to contribute 19 percent of GDP in 2004-05 has come down to 14 percent in 2011-12 at 2004-05 prices, according to government data. The percentage has been declining gradually with the passing of years.

[caption id="attachment_449049" align="alignleft" width="380"] From 19 percent in 2004-05, the percentage share of agriculture & allied sectors in GDP dropped to 18.3 percent in 2005-06 and then to 17.4 percent in 2006-07. Reuters[/caption]

From 19 percent in 2004-05, the percentage share of agriculture & allied sectors in GDP dropped to 18.3 percent in 2005-06 and then to 17.4 percent in 2006-07.

It further dropped to 16.8 percent in 2007-08 and 15.8 percent in 2008-09 before reaching 14 percent in 2011-12, the data showed. The decline is on account of comparatively higher growth in GDP of non-agriculture sectors, official sources said.

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But, capital investment in the sector has shown improvement. As per official figures, Gross Capital Formation (GCF) investment in agriculture sector (at 2004-05 prices) has increased from Rs 69,148 crore in 2004-05 to Rs 1,30,907 crore in 2010-11.

Besides, the agriculture sector has shown an average growth rate of 3.3 percent annually in the Eleventh Five Year Plan period ending March 31, 2012 as compared to 2.4 percent per annum during the Tenth Plan.

Foodgrain production has also shown an increase from 217.28 million tonnes in 2006-07 to 257.44 million tonnes in 2011-12, it said. As per UN's body Food and Agriculture Organisation (FAO), India accounted for 2.3 percent share in world's total land area and 17.5 percent of world's population.

PTI