Scope of agri sector bringing prosperity limited: Panagariya

He said with the share of agriculture in the GDP at about 15% now, workforce engaged in this sector is significantly poorer than the other half employed in industry and services

NITI Aayog Vice Chairman Arvind Panagariya today said the potential of farm sector to bring prosperity to a vast population in the long-run is limited and the country needs to focus on creating more jobs in the industrial and services sectors.

"...In countries experiencing growth rates of 6 per cent or more over long periods... Industry and services have grown substantially faster than agriculture... In this context that the creation of good jobs in industry and services is critically important," he said in his first blog post published on newly launched website of NITI Aayog.

Panagariya said with the share of agriculture in the GDP at about 15 per cent now, workforce engaged in this sector is significantly poorer than the other half employed in industry and services.

"But in the longer run, the potential of agriculture to bring prosperity to a vast population remains limited," Panagariya said.

He underlined the importance of job creation in industry and services for overall prosperity of the nation.

"...Agricultural growth and the expansion of good jobs in industry and services can go hand-in-hand to bring rapid elimination of poverty and shared prosperity for all," Panagariya said.

He said unless workers have the opportunity to migrate to better paid jobs in these sectors, they will be unable to fully share in the prosperity experienced by a fast-growing economy.

The NITI Aayog Vice Chairman cited the example of South Korea and Taiwan where prosperity was widely shared during the 1960s and 1970s because workers in agriculture could migrate to good jobs in industry and services.

Indian farmers and their children recognise the superior prospects that faster-growing industry and services can potentially offer, Panagariya said.

According to a recent survey conducted by NGO Lokniti, 62 per cent of all farmers say that they would quit farming if they could get a job in the city. As for their children, 76 per cent say that they would like to take a profession other than farming.

He said that the Make in India campaign has provided the umbrella for many of the government's initiatives in this context.

He thinks that using the instrumentality of cooperative federalism, the government has encouraged states to undertake labor law reforms that would help stimulate jobs.

States of Rajasthan and Madhya Pradesh have taken lead in this area, Panagariya said in his blog.

The Centre intends to consolidate the 44 central labor laws into five while simultaneously introducing important employment-friendly reforms, it said.