Indian Agriculture: Current Share in GDP and GCF
The share of agriculture in GDP of India
- Agriculture and Allied Sector contributed approximately 13.9% of India’s GDP (at constant 2004-05 prices) during 2013-14. However, when CSO released the new GDP numbers in early 2015, the share of these sectors went up to 18% at 2011-12 prices; mainly due to base effect. This figure of 18% comes by addition of share of crops (11.4%, maximum), Livestock (3.9%), Forestry and Logging (1.4%) and Fishing (0.9% minimum).
- In 1950-51, the share of agriculture in GDP was around 55%. While secondary and tertiary sectors got momentum under various five year plans; the agriculture was left behind; partially due to the fact that agriculture is a state subject and states had the responsibility to carry out centre’s plans well.
- While share of agriculture in India’s national income has gradually fallen; the share of service sector has increased gradually and India is on the path of becoming a truly service economy.
The 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%).
- By gross capital formation (GCF) we mean investment. The percentage of the investment made each year out of the total GDP is called Gross Capital Formation. 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.