The Economic Survey 2020-21 tabled in Parliament today said: “Agriculture has remained the silver lining, while contact-based services, manufacturing and construction sectors were the worst hit by the COVID-19 pandemic”.
The survey added: On the supply side, Gross Value Added (GVA) growth pegged at -7.2% in FY21 as against 3.9% in FY20:
• Agriculture set to cushion the shock of the COVID-19 pandemic on the Indian economy in FY21 with a growth of 3.4%
• Industry and services estimated to contract by 9.6% and 8.8% respectively during FY21
• Agriculture remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and recovering steadily
It is ironic that the farmers on protest at the Capital’s borders are the same set of people who saved India’s GDP from sliding into a free fall last year. In fact, even before the pandemic, the farm sector boosted the country’s economic growth during severe phases of slowdown. Minus the farmers, the economy would likely have disintegrated.
For example, in the first quarter of 2020-21 (April-June 2020), the economy tanked by a negative 24%, but agriculture registered a positive growth. In the next quarter (July-September 2020), as the GDP remained in the negative territory (minus 7.5%), the farm sector grew by a healthy and robust positive 3.4%.
If the country undergoes a V-shaped growth trajectory, i.e. a fast recovery, as the finance minister and Reserve Bank of India expect, one will need to thank the country’s farmers.
At the same time, one has to understand that it was the villages and the croppers who saved millions of lives during the pandemic. As reverse migration forced tens of millions to return back, without earnings, savings, and jobs, it was the bountiful agriculture production across states that fed them, and saved them.
Both the migrants’ families and their neighbours in the villages and small towns had enough produce to keep everyone’s stomachs full. Not many went hungry. No starvation deaths were reported in the media.
Global lockdowns, due to the pandemic, forced factories, shops, and other venues of production to shut down. Hence, India’s exports dried up. Even in such a scenario, agriculture exports grew by an incredible 43.4% in April-September 2020. The main contributors included groundnut, refined sugar, wheat, and rice.
Agriculture set to cushion the shock of the COVID-19 pandemic on the Indian economy in FY21 with a growth of 3.4%Industry and services estimated to contract by 9.6% and 8.8% respectively during FY21Agriculture remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and recovering steadily