The 7.2% fall in gross value added (GVA) for 2020-21, as per the National Statistical Office’s first advance estimates released on Thursday, would be the sharpest ever recorded in India.

Earlier slumps

There have been four earlier occasions when the country’s GVA — which is GDP net of all taxes and subsidies on products and, hence, a more accurate measure of economic activity — has suffered contraction.

The extent of negative growth in those years — 1979-80 (minus 5.2%), 1972-73 (minus 0.3%), 1965-66 (minus 3.7%) and 1957-58 (minus 1.2%) — was lower than the 7.2% being projected for the current fiscal.

But it isn’t just the bigger decline in GVA/GDP this time that is striking. Equally significant is the fact that in each of those four previous years, the primary culprit was agriculture. All four were drought years — and the farm sector (agriculture, forestry and fishing) registered minus 12.8% growth in 1979-80, minus 5% in 1972-73, minus 11% in 1965-66 and minus 4.5% in 1957-58. In effect, the woes of ‘Bharat’ impacted the rest of the economy.

But it isn’t just the bigger decline in GVA/GDP this time that is striking. Equally significant is the fact that in each of those four previous years, the primary culprit was agriculture. All four were drought years — and the farm sector (agriculture, forestry and fishing) registered minus 12.8% growth in 1979-80, minus 5% in 1972-73, minus 11% in 1965-66 and minus 4.5% in 1957-58. In effect, the woes of ‘Bharat’ impacted the rest of the economy.

Share in economy

If Bharat’s doing well hasn’t prevented the worst economic slump since independence, the reason is simple. In 1979-80, agriculture’s share in India’s GDP at constant prices was 33.9%; in 1957-58, it was 48.2%. A drought year in those times invariably translated into low/negative growth rates.

It is different today. The share of agriculture in real GVA was only 14.6% in 2019-20. That is estimated to go up to 16.3% this fiscal, but not enough to make a different even in a bountiful monsoon year.

Source: IE