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Syndrome of Declining Economic Importance of Agriculture in Bihar (1960-2018)

Date: January 13,2022 |Hits: 274 Download PDF How to cite this paper

Jitendra Kumar Sinha1,*, Anurodh Kumar Sinha2

1Retired Sr. Jt. Director, DES, Bihar, India.

2Monitoring &Evaluation, BRLPS (JEEViKA), India.

*Corresponding author: Jitendra Kumar Sinha


As economic development proceeds, agriculture declines as a proportion of GDP. This paper utilizes existing methodology to analyze this issue with time series data (1960-2018) for Bihar. The study focuses on changes in the GDP shares of agriculture, manufacturing and services, and considers the implications of these changes for overall economic performance. A decomposition of the total decline in the share of agriculture in GDP suggests that the relative price effects which have received the most attention in the literature were found to be relatively minor influences. Decline in the price of agricultural output relative to the price of manufactured output contributed around ten per cent of the measured decline in agriculture's share of GDP. The rise in the relative price of services contributed an additional 18 per cent. Changes in the economy’s stocks of capital and labor, and a possible bias against agriculture in technical change were found to contribute over three quarters of the total decline in the share of agriculture in the Bihar economy. The importance of the capital and labor variables accounting for almost three quarters of the observed decline in the share of agriculture. Supply side influences such as capital accumulation and technical change may be the most important determinants of the decline in agriculture’s share of GDP in Bihar. Demand side factors operating through relative commodity prices, seem to be much less important. This conclusion has major implications for policies for economic development and structural change, and suggests a need for reorientation of the literature on agriculture’s role in economic development towards supply side influences of factor accumulation and technical change.


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How to cite this paper

Syndrome of Declining Economic Importance of Agriculture in Bihar (1960-2018)

How to cite this paper: Jitendra Kumar Sinha, Anurodh Kumar Sinha. (2022) Syndrome of Declining Economic Importance of Agriculture in Bihar (1960-2018). Journal of Humanities, Arts and Social Science6(1), 1-15.

DOI: http://dx.doi.org/10.26855/jhass.2022.01.001

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