Sectoral Growth

Agriculture contributes nearly 49 per cent of the state’s income (table 2.2), compared to 25 per cent at the all-India level; industry accounts for only 15 per cent, compared to 27 per cent for the nation; and services account for 36 per cent of the state’s income, in comparison to the all-India figure of 48 per cent.  In recent years, the sectoral composition has shifted from industry to services. While the combined share of industry (manufacturing) and services has remained the same at around 52 per cent during the last decade and a half, the share of manufacturing has declined to 2.5 per cent in 1995-96 from around 6 per cent in 1980-81. Public administration has, by default, become the propelling force behind the growth of services. In spite of high growth rates in the state, employment opportunities outside the government have remained restricted.

Sectoral shares for the period 1996-97 and 1997-98 according to the new GSDP series published by the CSO are given in the table below.

Table 2. 3: Sectoral Shares of GSDP at Current Prices   

                              (per cent)

Sector

1980-81

1985-86

1990-91

1993-94

1995-961

1995-962

1996-972

Agriculture and allied

  Activities

48.68

47.40

42.63

45.30

48.99

33.30

32.44

Industry

20.91

19.62

14.74

14.90

14.94

19.37

17.47

 Mining & quarrying

0.23

0.21

0.21

0.26

0.22

0.21

0.12

 Manufacturing

6.07

5.35

3.97

3.04

2.51

4.94

4.61

 Construction

15.10

13.28

10.41

11.10

10.54

11.48

10.30

Services

30.40

32.98

42.63

39.80

36.08

47.33

50.09

 Transport

1.11

2.55

3.65

3.05

2.63

2.34

3.39

 Trade, hotels, etc.

5.95

5.46

8.66

8.05

6.62

12.22

13.46

 Public administration

9.28

8.88

11.98

11.99

11.10

11.25

12.04

Note:   1. Provisional data.

           2. New estimates of GSDP published by CSO.

Source: Central Statistical Organisation.

 Constant Share of Agriculture

Population has grown faster than economic activity in the agricultural sector. With few employment opportunities outside the sector, the growth of agricultural labour force has also exceeded the growth of cultivated area. The mounting demographic pressure and physical limits to cultivable land have made Sikkim a net importer of all the essential agricultural goods.

Declining Share of Industry

Industry’s share in GSDP is only 15 per cent, of which 10 per cent is accounted for by construction, and 2.5 per cent by registered manufacturing (table 2.2). Industrial activity is quite rudimentary. There is virtually no organised private industry of any size in the state. Nearly, all the units of any size are in the public sector, most of which run at a loss.

Rising Share of Services

Of the 36 per cent share of services in the state's income, 11 per cent is accounted for by traditional subsistence activities, unskilled construction work or government employment. The share of public administration has risen nearly by 2 per cent points during the period, which in part reflects the philosophy that the government's major task is to provide employment. For example, the Public Works Department organises its work with the non-commercial objective of generating employment. It justifies its demands for more funding for road building projects in remote areas, not on the grounds that roads are important for economic development but that these projects will result in more jobs.

            From the new estimates (shown separately in the last two columns of the table) it is clear that share of agriculture has drastically declined to around 32 per cent in the year 1996-97. Industry's share has shown a modest increase to around 17 per cent in 1996-97which is still lower than the 21 per cent share it had in 1980-81. The services sector has witnessed a large increase to around 50 per cent in 1996-97.