The rural economy, driven by the agricultural sector, has consistently weathered both waves of the pandemic, as details of India’s first quarter gross domestic product (GDP) estimates released by the government on Tuesday show.
Experts attributed the 20.1% recovery in overall growth in the first quarter of 2021-2022 to a strong base effect, compared to 1.6% year-on-year in the fourth quarter of 2020-2021.
However, the agricultural sector has seen little slowdown, with the gross value added (GVA) of agriculture remaining at 4.5% year on year. GDP is the broadest measure of income or production. GVA, in a rough sense, is GDP minus taxes.
GDP data released on Tuesday shows that the agricultural sector, which employs half of all Indians, has grown steadily throughout the pandemic.
Agricultural GDP, or farm growth, was 3.5% in the first quarter of 2020-2021. In the second quarter, it edged down to 3%. In the third quarter, just before the start of the pandemic, agricultural growth reached a record 4.5%.
The resilience of agriculture is evident in the growth rates, which have never turned negative. Compared to positive growth rates in agriculture, data on Tuesday shows sectors such as manufacturing rose 49.6% from minus 36% a year ago.
“The point is, it’s easy for an industry to show strong growth if the growth was weak before. However, agriculture has seen robust growth from an already high base, ”said analyst Ashok Agrawal of Comtrade, a commodities trading company.
The heavy rains of the past two years are one of the main reasons for the steady growth of the agricultural sector, analysts said. Almost 60% of the country’s net land area depends on the annual summer monsoon. Farmers are also the only direct beneficiaries of cash transfers, helping to cushion rural incomes.
GDP per worker in agriculture represents one third of GDP per worker in the economy as a whole. This means that the productivity of agriculture is too low to revive the overall economy.