ASSOCHAM highlights slowdown of Punjab economy in 10 years
THE ASSOCIATED Chambers of Commerce and Industry of India aka ASSOCHAM released a paper on Wednesday, highlighting Punjab’s slow economic growth in the past 10 years along with its dismal performance in service as well as agriculture sectors. The paper, titled ‘Action agenda for new government of Punjab’, says the state’s overall economic growth rate reached its lowest level of 4.9 per cent in 2014-15 from 10.2 per cent in 2006-07.
THE ASSOCIATED Chambers of Commerce and Industry of India aka ASSOCHAM released a paper on Wednesday, highlighting Punjab’s slow economic growth in the past 10 years along with its dismal performance in service as well as agriculture sectors. The paper, titled ‘Action agenda for new government of Punjab’, says the state’s overall economic growth rate reached its lowest level of 4.9 per cent in 2014-15 from 10.2 per cent in 2006-07. A marginal improvement was witnessed in 2015-16, when it increased to 5.96 per cent compared to the previous year but Punjab’s contribution to India’s economy has declined from 3.3 per cent in 2004-05 to 2.9 per cent in 2015-16.
Spelling out the dismal situation in the agriculture sector, which has remained the engine of economic growth in Punjab, the ASSOCHAM paper says the sustainability of growth in the agriculture sector is under question. The sector has registered a compound annual growth of 1.6 per cent from 2004-05 to 2014-15 that is worse than all of India. “On the one side, the agriculture sector is turning less remunerative compared to the early green revolution period and on the other, natural resource constraint such as degradation of soil health and dramatically falling underground water table is increasingly becoming more severe,” it says.
The paper also highlighted that the services sector growth rate has increased from 6.6 per cent in 2005-06 to reach its peak level of 11.8 per cent in 2011-12, recording a downfall thereafter. In 2015-16, service sector gross value added growth rate is 6.3 per cent, the paper added.
“As of 2015-16, the state has attracted Rs 1.98 lakh crore outstanding investments and recorded a sharp deceleration over the years. The state’s outstanding investment growth rate has declined from the peak level of 91 per cent in 2007-08 to -10.5 per cent in 2015-16. ASSOCHAM suggests that the newly formed government must look at this on priority basis which will help accelerate investment activities in the state as well as encourage private sector to invest in the state,” the paper says.
“The state has potential for agriculture and its allied sector but the sector growth rate has recorded significant deceleration. Though the service sector has been the largest contributor of the state economy, the last four years have witnessed significant moderation in its growth rate as well. Therefore, it is necessary that the state concentrates on the corrective measure to revive the sectors. The government must also ensure that growth is job-augmenting, rural-oriented and participatory in nature,” noted the paper.
It has also stated that Punjab holds significant potential to create over 11 lakh additional jobs from the current workforce of about 18.5 lakh in the age group of 15-30 years to attract more investment and attain double-digit growth in the course of next five years.
The paper points out that Punjab is the eleventh-largest state in India in terms of number of unregistered MSMEs (Micro Small and Medium Enterprise) and the tenth-largest state in terms of registered MSMEs. The state’s unregistered MSMEs account for 4.9 per cent of India’s unregistered MSMEs and registered MSMEs account for 3.08 per cent of India’s MSMEs. The MSME industry generates significant employment opportunities in Punjab. Unregistered MSMEs generate 14.16 lakh jobs and registered MSMEs 4.16 lakh, highlighted the paper.