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Farm output may be affected due to late monsoon

Delayed and deficient monsoon sowing of the kharif crops which account for nearly 57% of the country's total agricultural output. It could adversely affect farm production this year impacting food prices. The progress of the south west monsoon has been slow and halting. While Kharif sowing has picked up in June 2009. As monsoon continues to play truant and the possibility of a drought gets real, the performance of the Indian economy is under threat. assuming a normal monsoon, most research agencies and organizations had forecast a 6 per cent plus real growth in gross domestic product (GDP) for 2009-10. India's central bank, the Reserve Bank of India (RBI), had forecast 6 per cent, National Council for Applied Economic Research (NCAER) 6.5 per cent, the Prime Minister's Economic Advisory Council 6.5 to 7 per cent, Crisil 6.3 per cent, ICRA 6.5-7.5 per cent and Fitch 5 per cent. Agricultural production is likely to fall 5 per cent and GDP with service sector estimated to grow at 7 per cent and industrial growth at 4 per cent, is likely to be around 44.5 per cent against an estimated over 6 per cent. Agriculture contributes around 25 per cent to GDP. Most hit would be the agro-based industries (edible oil, textiles, sugar), big ticket consumer durable items and the postponable FMCGs.

Drought years have brought negative growth rates for the agricultural economy. During the past 60 years, there was a drought every few years. And almost always, the agri economy witnessed a negative growth. For instance, in 1965-66, when agriculture contributed to 43 per cent of overall GDP, a massive 4.8 per cent of the GDP growth rate got knocked off due to drought. In 2002-03, a notable 1.55 per cent of the GDP growth got wiped off because agriculture then comprised 21 per cent of overall GDP.

How drought impacts the overall GDP growth rate of the country

Drought years

Agriculture GDP growth rate (%)

Impact on overall GDP growth rate (%)

1951-52

1.49

Nil

1965-66

-11.04

-4.78

1966-67

-1.42

-0.6

1968-69

-0.16

-0.07

1972-73

-5.02

-2.06

1974-75

-1.52

-0.63

1979-80

-12.77

-4.64

1982-83

-0.28

-0.1

1985-86

0.31

Nil

1987-88

-1.59

-0.5

2002-03

-7.24

-1.55

Source: CMIE, National Remote Sensing Centre, ISRO, BW Research

 
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