INDUSTRIES, SERVICES SECTOR GROWTH DECLINED IN 2016-17 TO 2020-21

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• Agriculture sector’s contribution to Tamil Nadu’s overall growth had increased, while industries and services sector growth had come down during the five-year period from 2016-17 to 2020-21
• According to the State Finance Audit Report of the Comptroller and Auditor General of India (CAG) for the year ending March 2021, which was tabled in the Legislative Assembly on Wednesday.
• The Gross State Domestic Product (GSDP) is the value of all the goods and services produced within the boundaries of the State in a given period.
• Changes in sectoral contribution to the GSDP is important to understand the changing structure of the economy, it said.
• The economic activity is generally divided into primary, secondary and tertiary sectors, which correspond to the Agriculture, Industry and Service sector.
• The State’s growth rate of GSDP in 2020-21 at current prices was 5.87% as against India’s growth rate of negative 2.97%.

Data

• As per data shared in the report, agriculture sector growth in GSDP was 3.83% in 2016-17, 17.96% in 2017-18, 7.93% in 2018-19, 12.48% in 2019-20 and 10.11% in 2020-21.
• The industries sector growth in GSDP was 11.62% in 2016-17, 11.86% in 2017-18, 11.16% in 2018-19, 8.24% in 2019-20 and 2.90% in 2020-21.
• The service sector growth in GSDP was 10.39% in 2016-17, 11.49% in 2017-18, 13.49% in 2018-19, 10.45% in 2019-20, 6.37% in 2020-21.
• There was a drastic decline in the rate of growth in all three sectors during 2020-21, CAG noted.
• The CAG said Tamil Nadu’s revenue deficit increased to ₹62,326 crore (3.28% of GSDP) in 2020-21 from ₹12,964 crore in 2016-17.
• Existence of revenue deficit is a cause of concern as revenue receipts were not able to meet even the revenue expenditure.
• The fiscal deficit grew 56.17% to ₹93,983 crore in 2020-21 from 2019-20, it noted.
• The report also recommended that the State government had to initiate measures for creating increased fiscal space through augmenting own revenues.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB