M A I N   N E W S

Foodgrain output set for new high: Pawar
* Record production will tone down inflation
* Give boost to various industry segments
Tribune News Service

New Delhi, February 9
Foodgrain production is likely to touch a record 263.2 million tonnes (mt) this year, beating the previous high achieved two years ago, Agriculture Minister Sharad Pawar said today.

“The country is likely to achieve record 263.2 million tonnes foodgrain production this year. This would be about 4 mt higher than the record of 259 million tonnes achieved two years ago,” Pawar said at an agricultural exposition in Nagpur.

Agriculture makes up for 14 per cent of the total GDP and 53 per cent of the work force. A strong performance by the sector has ensured a higher GDP of 4.9 per cent this year compared to 4.5 per cent last year. In the wake of good performance of the agriculture sector, the Central Statistics Office (CSO), in its recently released advanced estimates for the current fiscal, has projected 4.6 per cent growth in agriculture and allied sectors, a huge jump from 1.4 per cent a year earlier.

Besides giving an impetus to rural spending, record foodgrain production will tone down inflation and boost industry segments such as consumer durables and two wheelers, besides the construction activity.

Given the dismal state of the economy and high consumer inflation, a sterling show by the agriculture sector is sure to come as relief for the UPA government, particularly when the General Election are just a couple of months away.

Experts say a revival in agriculture will boost rural spending. Sucha Singh Gill, Director General, Centre for Research in Rural and Industrial Development (CRRID), Chandigarh, said every 1 per cent growth in agriculture would add 20 basis points to the GDP number. India Ratings expects industrial growth to improve to 4.1 per cent in financial year 2015 helped by rural consumption and exports demand. Gill said as a result, rural incomes would improve resulting in higher spending. The other spin off benefits would be that agriculture credit payments to the banks would improve, condition of rural labour would get better, those involved in trading of agriculture commodities would gain more income and sales of agri inputs like fertilisers would get a boost. “The rain gods should be thanked for the huge jump in foodgrain production”, said Gill.

Though there will be a sobering impact on inflation, experts say that distribution needs to be improved. Says Ramesh Adige, public policy analyst , “It is important to increase foodgrain, pulses, oilseeds, vegetable and fruit production. However, the crucial point is to improve the distribution system if food inflation is to be brought under control”.

A review by the National Council for Applied Economic Research (NCAER), while noting an all-time high foodgrain production is expected this year, has said that next year for 2014-15, agricultural growth is expected to return to normal level and the projection stands at 2.1 per cent.

R K Gupta, Managing Director, Taurus Asset Management, said the recent inflation had been on the back of fruit and vegetables. How much inflation can come down remains to be seen.

Higher GDP expected

• Higher farm output has ensured a higher GDP of 4.9 per cent this year. The GDP was 4.5 per cent last year
• Projected growth in agriculture and allied sectors is 4.6 per cent. This is a huge jump from 1.4 per cent a year earlier