Farm crisis slows down Maharashtra’s growth to 7.3% from 10%

Worst hit is the agriculture sector, which has shown a negative growth of 8.3% from a robust increase of 22.5% in 2016-17. The manufacturing sector has also slowed down. Only the services sector continues to grow, although marginally.

The BJP-led state government, which was counting on a double-digit economic growth figure in 2017-18, has to reconcile with a drop of 2.7 percentage points instead.

A farmer loading turmeric on a tractor trolley at Vadgaon village in Karad, Maharashtra. (PTI File Photo)

The state grew by 7.3%, according to the economic survey report tabled in the Maharashtra legislature on Thursday, far less than the 10% figure in 2016-17.

Worst hit is the agriculture sector, which has shown a negative growth of 8.3% from a robust increase of 22.5% in 2016-17. The manufacturing sector has also slowed down. Only the services sector continues to grow, although marginally.

In 2016-17, the state’s economy had posted a growth of 10% over the previous year thanks to a recovery in agriculture and a 106.9% spike in overall foodgrain production. This year, the state’s Gross State Domestic Product (GSDP) – measurement of economic output of the state – showed a story in reverse.

The GSDP has been dragged down by negative 8.3% agriculture and allied sector growth. The worse performance in this sector has been in the total output of crops at a negative 14%. The production of crops (except for sugarcane) is down by 95.79 lakh metric tonnes.

Over the last year, output shrank in the production of foodgrains ( -22.9%), oilseeds (-18.1%), cotton (-44%). Sugarcane is the only major crop in the state’s food basket that posted an increase in production by 25.1%. The production of major horticulture crops such as vegetables has also reported a drop by negative 14%, while that of fruits has increased only marginally by 2.3%.

While the report points a finger to less rains in 2017-18 ( 84.3% of the normal monsoon) as compared to 2016-17 for the drop in agriculture production and growth, officials admit that several other reasons such as pest attacks, change in rainfall patterns, unseasonal rains and hailstorms had posed a problem for the sector. This has reflected in the agrarian crisis and discontent on ground in the state.

Compared to agriculture, the state’s industrial growth has been modest at 6.5% in 2017-18 over 2016-17. But it is still lower when compared to the 6.9% growth in 2016-17 over its corresponding earlier year.

Within industry, manufacturing as a sub sector has taken a hit despite the Make in Maharashtra initiative, posting 7.6% growth, a figure lower than the two earlier years. In 2016-17, manufacturing sector had posted 8.3% growth over 2015-16 and in 2015-16, the sector had posted 8.2% growth over the previous year. Mining and quarrying activities output has also been slashed to 2.7% over 2016-17 — when it was 7.6% over the previous year.

The services sector has continued to power Maharashtra’s economy posting a growth of 9.7%, a marginal 0.1% hike from the 2016-17 figure. The financial, real estate and professional services saw a jump in growth to 10.3% this year from 9% earlier.

“The negative growth in agriculture is worrisome. Even as the prime minister and chief minister keep talking about doubling of farmers’ income by 2022, in the state, agriculture growth from 2013-14 to 2016-17 has only increased by 5%. This year’s pink bollworm pest attack and falling market prices for produce has been reflected in the economic survey statistics,’’ said former chief minister and Congress leader Prithviraj Chavan.

He said on the whole, the growth figures in 2017-18 had slipped from a double-digit growth trajectory thanks to demonetisation and the mess in implementing the Goods and Services Tax. “Industry figures have slipped consistently from 2015-16 and this shows an overall slowdown in the sector, too.’’

State finance minister Sudhir Mungantiwar, however, said the fall in agriculture growth was due to less than average rain, an increase in marginal land holdings and drop in production outputs. “This is a challenge, but as a government we have invested nearly Rs 83,000 crore in agriculture and allied sectors from the Rs 24,000-crore investment in 2011-12. We plan to focus on group farming, setting up more farmer production companies to deal with fragmented land holdings.’’

“The big picture is that as against country’s growth rate of 6.5%, the state has posted growth of 7.3%. In absolute numbers our GSDP is Rs 24.96 lakh crore. The per capita income in Maharashtra is among the highest in the country and has increased from Rs 1.80 lakh from Rs 1.65 lakh last year,’’ he said.

From 2011-12 to 2017-18, the state’s growth story shows services sector is growing annually at an average rate of 8.8%, followed by industry, which is growing modestly at 6.1%.