States with a higher share of agriculture and mining in their GSVA witnessed a lower contraction in economic activity

States with a higher share of agriculture and mining in their Gross State Value Added (GSVA) witnessed a lower contraction in economic activity due to the Covid-19 pandemic compared to States with a higher share of industry and services, necessitating differential policy responses in States supplementing national policy response to mitigate the impact of the pandemic, according to an article published in the RBI Bulletin.

The article titled ‘Impact of COVID-19 on Economic Activity Across Indian States’ said the agriculture sector continued to be the silver lining witnessing the least decline in growth. Within services sector, some services witnessed a benign impact due to the work from home/work from anywhere policy of the companies and robust use of internet for seamless continuation of work. However, contact intensive services were the most negatively impacted, while services like public administration tried to provide a cushion against significant downfall in services. States having an economic structure with dominance of manufacturing, also, witnessed the brunt of lockdown more than others.

Within agriculture sector, States with higher share of forestry and logging in GSVA witnessed a relatively lower impact on economic activity. It was also evident that States with high share of manufacturing and services in their GSVA witnessed relatively more impact on economic activity. 

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