In each of those four previous years, the primary cause was agriculture.
All four were drought years and the farm sector (agriculture, forestry and fishing) registered minus growth.
minus 12.8% in 1979-80, minus 5% in 1972-73, minus 11% in 1965-66 and minus 4.5% in 1957-58
What is different this time?
The low growth in agriculture in the previous years, in turn affected the rest of the economy.
However, this is not the case in 2020-21.
So, beyond the bigger decline in GVA/GDP this time, it is the sector that is behind the decline that is more significant.
While overall GVA is expected to shrink 7.2%, agriculture and allied activities are set to post 3.4% growth.
During the worst phase of Covid-19 and the nationwide lockdown, it is the farm sector that kept the rest of the economy going.
If the farm sector had not grown at all, the GVA decline would have worked out to 7.7%, not 7.2%.
Incidentally, in 2019-20 as well, agricultural growth at 4% surpassed the 3.9% for the economy as a whole.
Reasons:
Agriculture’s relatively better performance in the last 2 years is largely a result of consecutive years of good monsoon (and also post-monsoon) rains.
Recharged groundwater tables and reservoirs getting filled to near capacity led to increase in crop acreages and higher production.
Besides these, farming operations being exempted from lockdown restrictions also helped.
Why has this not prevented the economic slump?
The farm sector doing well has not however prevented the current worst economic slump.
This is because in 1979-80, agriculture’s share in India’s GDP at constant prices was 33.9%; in 1957-58, it was 48.2%.
In effect, a drought year in those times invariably translated into low/negative growth rates and vice versa.
However, the condition is different today. The share of agriculture in real GVA was only 14.6% in 2019-20.
This is estimated to go up to 16.3% this fiscal, but not enough to make a big difference in the economy even in a bountiful monsoon year.
