Search the Internet          Tips  Sites: Finance, Investment

India's economic growth linked to agri-sector

Agriculture holds the key to 5-5.5 per cent growth this year as the current projection hinges on the farm sector hit by drought turning out to be "more resilient than was initially apprehended".

The first mid-year review of the economy presented to the Parliament, on Tuesday, said improved agriculture is also crucial for containing prices and restricting inflation to about three per cent.

Greater resilience in agriculture will mean that the decline in foodgrains production is limited to 10 million tonnes than the first advance estimates of 21 million tonnes.

If the fall in agri-output is on the lower side, overall GDP growth in agriculture, forestry and fisheries could drop o about one per cent this year from the high of 5.7 per cent recorded in 2001-02, the review said.

"With a net positive growth of one per cent in the sector, overall growth in the current year may be close to the 5.5 per cent projected by the Reserve Bank of India".

The review has put its hopes on buoyant market arrivals and procurement of rice so far, at levels marginally higher than those in the previous kharif season. "The impact of drought is telling only in such areas as depend primarily on rainfed cultivation".

It describes the initial estimates of 13 million tones fall in rice production as tentative but concedes that significant fall in production is likely in coarse cereals, pulses and oilseeds.

ALSO READ:
Mid-term Economic Review 2002
More Money Headlines