Punjab: Growth continues downward spiral

The state’s economy is set to expand by 6 per cent in the current fiscal, continuing a downward trend since 2022-23 when it had recorded a growth rate of 6.6 per cent.

The advance estimates for 2024-25 fiscal ending March 31 are 0.2 per cent below the 6.2 per cent Gross State Domestic Product (GSDP) rate witnessed in 2023-24.

Agriculture and allied activities are expected to comprise a quarter of Punjab’s output in the current fiscal, according to the Economic Survey.

On the other hand, the industrial growth is expected to shrink by 1.2 per cent and services sector by 0.3 per cent when compared with 2023-24. Since 2020-21, the state’s economy has seen an average growth rate of 4.9 per cent.

In 2024-25, the state’s agriculture and allied sector is expected to expand by 3.1 per cent, a notable rise from the 1.3 per cent recorded in 2023-24.

Compared with national trends, Punjab’s gross state value added (GSVA) — a measure of the value of goods and services produced within a state — is more evenly distributed across sectors.

Although the services sector has become the largest contributor, agriculture and industry continue to hold a substantial share in the state’s GSVA.

Agriculture and allied activities are expected to contribute 25 per cent of Punjab’s GSVA in 2024-25 while employing 27 per cent of the labour force, says the survey prepared by the Department of Statistics. In recent years, however, Punjab has experienced uneven growth in agriculture, especially in crop cultivation. The GSVA growth of the sector 2024-25 is expected to be see a rise of 2.2 per cent.

This slowdown was most noticeable in the crop and livestock sector. This stagnation also seems to hold true in terms of wheat cultivation.

Since the 2000s, the area and yield of paddy and wheat have plateaued. Crop diversification has been advocated as the way forward in the report.

The industry sector contributing 28 per cent to Punjab’s output has sustained the growth rate exceeding 6.8 per cent over the past five years. The manufacturing sector, which makes up over 17 per cent of the GSVA, recorded a 4.6 per cent upswing in 2024-25. The services sector grew at 7.1 per cent in 2023-24 and 6.8 per cent in 2024-25. The services sector expansion was primarily fuelled by areas such as health, education, personal services, financial services, and public administration.

The per capita Income in Punjab is 1.05 times the per capita income at the all-India level. Ropar, Ludhiana and SAS Nagar are the leading districts in terms of per capita income since 2015-16.

In 2021-22, Ropar reported a per capita income of Rs. 2,18,098, Ludhiana Rs. 2,00,661 and SAS Nagar Rs 1,99,654. Ropar is agrarian district with 26 per cent of its gross district value ddded (GDVA) coming from the agriculture and allied sector.