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Changing Growth Prospects of Punjab
Economy through Different Sectors
Mrs. Pallvi
Assistant Professor
G.N.D.U. College Jalandhar, Punjab- India
Abstract:
Comparing Punjab with overall India Economy and other States, Punjab has been one of the most
prosperous States in India in the past but at present it is losing its prosperity because of economic and non
economic causes. The present paper shows that despite of dependence of huge chunk of population on
agricultural lands, the contribution made towards GDP reveals declining trends. Industrial sector which is
considered as an engine of growth requires manpower and strong capital base for its proper development.
But it also seems to be a hurdle in nation like India which is more labour abundant. Finally Service sector
is boosting our economy as its contribution towards GDP is seen ever –increasing.
Keyword: Growth, Development, Agriculture, Industry, Services, GDP, Policy Formulation
Introduction to Punjab Economy:
Punjab, one of the northernmost state of India. It consists of “Punj + Aab” which means land of five
waters. In the course of history it has seen many changes in its boundaries. The Geographical Punjab was
partitioned in 1947. Punjab has an area of 50362 square kilometers of Country’s total Geographical Area.
It is a land located state and situated between 29” and 32” North Latitude and 73” and 77” East Latitude.
The word “Growth” refers to increase in some quantity by size or in number terms. But the concept
“development” means Growth + Institutional changes which are better reflected in quality of life and
standard of living. In technical terms development refers to the use of resources on large scale, use of
technology and scientific methods, business expansions and professional set ups and help from regional
and international institutions. In short, Country floated with money would be called as richest not
developed. Therefore development of Country or State depends upon resource use within a given period
of time.
Policy Formulation:
As we know development policies are undertaken to improve growth rates of economy, infrastructure
base, and trade enhancement to bring financial stability. Therefore while formulating policies their impact
on macro economic variables should be kept in mind. As its effects differs in short and long run.
Pattern of Development:
Under the state Punjab following parameters study the development patterns of Punjab such as:
Area of Development
Indicators of Development
Strategy of Development
Growth of Sectors of Punjab
Impact on development of Economy
On the whole we can say that any development policy for a prosperous State of Punjab requires careful
initialization, process, results, analysis and a path for future prospects.
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Punjab’s Overview:
Punjab which is called as India’s Granary, adds a handsome amount of its shares in GDP along with its
contribution towards food security of Nation. Most of the Population of Punjab is engaged in agricultural
and allied activities. That is why this sector is considered as “backbone” of whole nation because it
supports other sectors of economy also. Now question arises while going for studying pattern of
development what should be the focus of whole strategy of growth. In this regard above mentioned
features can be studied for overall development along with that strategic planning should not be kept
aside. Careful examination under social purview should be present.
Focus:
The whole content of the paper depends upon growth of three main sectors of Punjab State, Primary,
Secondary and Tertiary Sectors. These sectors in itself includes the growth of the various dimensions in
complete sense and indirectly focus on overall growth of area under study. Paper focus on share of these
sectors towards gross domestic product of State under various time-periods.
At the time of Independence most of the states were rural in nature. Due to structural imbalances in was
difficult to uplift nation and to find out occupational adjustments. Hence there was need to recognize
strengths and to engage population in most lucrative opportunities. The above said phenomenon calls for
deep study of structural composition of GSDP from Primary, Secondary and Tertiary Sectors.
Sector Allocation:
Primary Sector includes agricultural and allied activities, mining, fishing, dairy, poultry, livestock etc.
Secondary Sector includes manufacturing, infrastructure, construction and industries.
Tertiary Sector includes services such as banking, insurance, transportation, hotels, tourism, trade
and administration etc.
Economic activities comprise above mentioned sectors accounts for greater participation of Punjab’s
manpower resources and its reserve capacity. On Indian front agricultural sector contributes around 17% of
GDP to national income, industrial sector around 26% and service sector around 56% to national income as
per 2014-15 date provided by agencies of Government. Hence paper supports the argument that among the
three sectors it is the service sector which is leading on both at the state and at Indian level.
Punjab’s Profile:
1. Punjab’s agricultural sector:
Punjab’s agricultural sector has strong base and its farmers in production for wheat, rice, barley and
maize etc. Punjab’s soil is fertile & productive and has accorded status of “Bread Basket of India”. This
sector occupies 1.5% of India’s Geographical area, state accounts for 17% Country’s wheat production
and11% of rice production which ultimately makes it suitable for agro-based industries, dairy farming and
products and other food processing industries.
In order to sustain contribution of agriculture and allied activities in the State and to achieve the target of
4% of growth as envisaged in the 12th Five Year Plan, acceleration of pace of capital formulation is the
need of the hour. The area of concern is that in Punjab agriculture is facing issues such as stagnation in
productivity, depletion in ground water levels, deteriorating soil health due to excessive use of fertilizers.
Hence it requires concrete efforts to smoothly run this sector and matching is pace with other sectors. So
Punjab’s profile in respect of agricultural sector represents little bit dark side of Punjab’s State due to its
falling contribution. Punjab agricultural sector is facing following challenging situation. The Agriculture
production in the state has reached a flat terrain. The soil health in the state has been deteriorating with
the continuation of rice-wheat rotation by farmers due to assured profits as compared to other crops. The
higher yield realization per unit area is also responsible for reduction of nutrients in the soil. In nut shell,
domination of wheat-paddy in food grains, decline productivity, in the absence of breakthrough in new
high yielding varieties, strains on marketing infrastructure, decreasing ground water resources and falling
in profitability etc. are problems which requires immediate attention.
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2. Punjab’s Industrial Sector:
The main industrial centres in Punjab are Ludhiana, Jalandhar, Amritsar, Mandi Gobindgarh, Batala and
Mohali. Ludhiana is known for the production of hosiery and readymade garments, bicycles and
components, sewing machines and parts, machine tools, auto-parts, industrial fasteners, electrical and
electronic goods. About 21 per cent of the total industrial units in Punjab are located in Ludhiana district.
Famous for hand tools, pipe fittings, valves and leather products, Jalandhar is well -known for its sportsgoods too. Mandi Gobindgarh, popularly known as the ‘Steel-Town’ of Punjab, hosts more than 300 steel
re-rolling mills despite being situated far from the sources of raw materials. Batala is famous in the
country for its castings and machine tools, while Amritsar is known for food products, paper machinery
and textiles. Mohali near Chandigarh, which attracted a number of ‘sunrise industries', thanks to its
location advantages and infrastructure, seems to have lost its momentum for growth in recent years.
The contribution of industrial sector in the GSDP for the year 2013-14 is 28.31% which though is higher
than the national percentage for the same period. Industrial Sector is also a driving force and provides
pace to economic growth. In State like Punjab where role of Industrial Sector is increasing as it employs a
large chunk of population in its domain and hence its contribution towards GSDP is increasing when
compared with last decade. Punjab’ GSDP was $21.6 billion over 2004-05 and is increased to US $57.7
billion over 2014-15.. All this credit goes to strong industrial base and which further provides a boost to
other secondary sector activities.
On Indian front also Government of India has taken initiatives in improving Economic Development via
FDI. For example Make in India initiative in September 2014 for 25 sector was introduced with relaxed
norms. Very large amount of FDI under automatic route is permitted in construction Sector for cities and
township further during the year 2013-14 FDI in textile sector was increased by 91% .
3. Punjab’s Tertiary Sector:
With movement from lower to higher stages of growth and development there exists a shift from simple
to complex structure of economy. Techniques of production become complicated on one hand and
economy shifts from primary to secondary and tertiary sectors on the other. The share of service sector in
GDP is increasing and is appearing as an engine of economic growth. In terms of contribution to GSDP
the primary sector is losing the share and both secondary and tertiary sectors are gaining the ground.
Primary
Secondary
Amount
%
Amount
%
1970-71 9088
46.55
3125
16.01
2012-13 35899
21.82
48511
29.49
Source: ESO Govt. of Punjab, various publications
Year
Teriary
Amount
7311
80115
%
37.44
48.69
Sub Sectors of Tertiary Sectors in GSDP Punjab.
Year
TSC
THR
B&I
RE
PA
OTH
1970-71 4.02
26.55
2.43
27.71
5.68
33.61
2012-13 14.22 25.45
18.68
9.73
10.14
21.76
Source; ESO, GOP, Various Publications. (In Rs. Crores, GSDP at Constant Price (2004-05))
ABBERIVATIONS:
TSC = Transport, Storage, Communication
HR = Trade, Hotels, Restaurants
B & I = Banking & Insurance
RE = Real Estate
PA = Public Administration
OTH = Others
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Workforce Participation in %
Place
Punjab
India
Sectors
Year 1983
Years 2011-12
Primary
67.93
36.45
Secondary
12.75
30.52
Tertiary
19.32
33.03
Primary
69.03
49.44
Secondary
13.76
23.72
Tertiary
17.21
26.84
Source: NSSO Reports, Various Issues
CONCLUSION:
Comparing Punjab with overall India Economy and other States, Punjab has been one of the most
prosperous State in India in the past but at present it is loosing its prosperity because of economic and
non economic causes. The present paper shows that despite of dependence of huge chunk of population
on agricultural lands, the contribution made towards GDP reveals a declining trends . Industrial sector
which is considered as an engine of growth requires manpower and strong capital base for its proper
development. But it also seems to be a hurdle in nation like India which is more labour abundant . Finally
Service sector is boosting our economy as its contribution towards GDP is seen ever –increasing .
Above paper represents that Tertiary Sector is considered to be as the main engine for growth as it is
contributing upto the maximum levels towards GDP at state level. Hence in the end we conclude that
State with more strong economic and infrastructure have a higher share of tertiary sector in domestic
product. Along with this much importance can be given to increasing share of FDI in various sectors
which helps in raising the level of economic activity which will ultimately make a path towards
development.
REFERENCES:
1. http://www.punjabiuniversity.ac.in/cdeiswebsite/downloads/discussion_papers/8%20Inderjeet%20
Singh.pdf
2. (Source : Economic Survey, GoI 2013-14).
3. http://www.ibef.org/states/punjab-presentation#sthash.7avjogfb.dpuf
4. https://www.nabard.org/pdf/Executive_summary_%28English%29_SFP_2015_16_Punjab.pdf
5. Inderjeet Singh, "Service Sector and Economic Growth in Punjab", September,2014.
6. "Industrial growth in Punjab on the decline", The Hindustan Times, Chandigarh dated: Jul 17, 2014
7. "7 major sectors attracting FDI for India" Yahoo Finance.13 September 2012, Retrieved 11 October
2015 (online).
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