'Decline in farm sector growth will hurt economy'

Warning that any slowdown in the already fluctuating farm sector will hurt the economy, the Economic Survey on Thursday decried the loss of dynamism in the agriculture sector, where it projected a slower 2.6 per cent growth this fiscal.

"Any deceleration in the growth of the agriculture sector is translated into a lower overall GDP growth," the Economic Survey for 2007-08, which was tabled in Parliament, stated.

Commenting on the farm sector, the Survey said that rule of law, assured irrigation, knowledge on technologies, farming practices and marketing, and all weather road connectivity might be lacking, particularly in the poor backward regions.

In view of uncertainties in global markets and hardening global prices of food, fuels and edible oils, it said domestic price stability and food security critically depend on growth in the agriculture sector.

Pointing out that there has been a "loss of dynamism" in the agriculture and allied sectors

in recent years, the Survey said there was a need for a second green revolution, mainly in the rainfed areas, to improve the farmers' income.

The Economic Survey also expressed concern over the lower growth of the farm sector vis-a-vis non-agriculture sectors.

The agriculture, forestry and fishing sector is estimated to grow at 2.6 per cent during 2007-08 as against the previous year's growth of 3.8 per cent, it said. The decline in the share of agriculture sector in GDP continued, with a decline from 24 per cent in 2001-02 to 17.5 per cent in 2007-08.

The survey attributed the deceleration in the growth of the farm sector to slackening in the growth of Rabi crops.

"With area under cultivation remaining constant, improving the productivity of crops is necessary to strengthen the farm sector," it said.

• Economic Survey 2007-08: Complete Coverage