Punjab should aim to achieve double digit economic growth in next 5 yrs
Punjab holds significant potential to create over 11 lakhs additional jobs from the current workforce of about 18.5 lakhs between the age of 15-30 years to attract more investments and attain double digit growth during the course of next five years, apex industry body ASSOCHAM said today.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) Special Task Force on Punjab has formulated a “Sustainable Action Plan” to achieve double digit growth on a sustainable basis to help the state to become one of the front ranking states in the country.
According to the paper, about 18.5 lakhs people are already a part of the workforce between the age group of 15-30 years. The current level of workforce participation rate stands at 35.7 percent and to achieve a similar rate an additional 11 lakhs jobs will need to be created in the next five years. The effective implementation of the investment projects holds key to growth of industry sector that will in turn help in creating lakhs of fresh job opportunities for 35.7 per cent of youth population that forms the workforce in the state.”
As on 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 91.0 percent in 2007-08 to -10.5 percent in 2015-16. ASSOCHAM suggest 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 state has potential for agriculture and allied sector but the sector growth rate has recorded significant deceleration. The service sector has been the largest contributor of the state economy but last four years have witnessed significant moderation in its growth rate as well. Therefore, it is necessary that 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 titled ‘Action agenda for new government of Punjab,’ that was released by ASSOCHAM in Chandigarh today.
The state’s overall economic growth rate reached its lowest level from 10.2 percent in 2006-07 to 4.9 percent in 2014-15. In 2015-16, it witnessed a marginal improvement in its overall economic growth to 5.96 percent as compared to previous year growth rate. The state’s contribution to India’s economy has declined from 3.3 percent in 2004-05 to 2.9 percent in 2015-16.
The services sector growth rate has increased from 6.6 percent in 2005-06 to reach its peak level of 11.8 percent in 2011-12 thereafter it has recorded a downfall. In 2015-16, service sector gross value added growth rate is 6.3 percent, adds the paper.
Punjab is the eleventh largest state in India in terms of number of unregistered MSMEs (Micro Small and Medium Enterprise) and tenth largest state in terms of registered MSMEs. The state’s unregistered MSMEs account for 4.9 percent of
India’s unregistered MSMEs and registered MSMEs account for 3.08 percent of India’s MSMEs. The MSMEs industry generates significant employment opportunities in Punjab. Unregistered MSMEs industry generates 14.16 lakh employments and registered MSMEs industry generates 4.16 lakh employments, highlights the paper.
On the industrial front, Punjab has recorded a compound annual growth rate (CAGR) of about 7.5% during 2004-05 to 2014-15. The state’s industrial sector contributes 27.0 percent of state’s economy in 2014-15 which was 24.7 percent in 2004-05. According to the census 2011, workforce dependent on industry is 3.9 percent of the total workforce in the state which was 3.7 percent in 2001, adds the paper.
Agriculture sector has remained the engine of economic growth in Punjab but sustainability of growth of the agriculture sector is under question. 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. The sector has registered a compound annual growth rate of 1.6 percent during 2004-05 to 2014-15 that is worse than all India. The performance indicates that state’s agriculture sector is not operating at its potential level.
The state’s agriculture & allied sector growth rate is quite uneven over the years and has recorded sharp fluctuation. The sector’s performance is indicating that the state has recorded a negative growth of 0.3 percent in 2009-10 and 0.5 percent in 2014-15. In 2015-16, agriculture & allied sector performance (GVA at 2011-12 base) is recorded at 5.2 percent.