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LATEST NEWS UPDATES | The mystery of agricultural growth -Himanshu

The mystery of agricultural growth -Himanshu

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published Published on Dec 9, 2016   modified Modified on Dec 9, 2016
-Livemint.com

Latest data released by ministry of agriculture shows that sowing of rabi crops, expected to be higher than last year, is still lower than normal area sown

That demonetisation will cause Indian economic growth to slow is no longer a matter of speculation. While clear estimates of the extent of deceleration will only emerge after some time, preliminary estimates of automobile sales and the purchasing managers’ index (PMI) for manufacturing suggest a slowdown in the manufacturing sector. The PMI for manufacturing fell from 54.4 in October to 52.3 in November. The PMI for services fell to 46.7 in November from 54.5 in October, suggesting a contraction in service sector activity. Given that the construction sector has already been muddling along at its lowest pace of growth in two years, the hope of an economic miracle now rests on the agricultural sector.

The ministry of agriculture released the latest data on sowing of rabi crops on 4 December. Given that the agricultural sector had been suffering the impact of back-to-back droughts in the past two years, sowing this year was expected to be higher than last year despite significant regional variations in the monsoon this year. The latest data does confirm that sowing of rabi crops is more than the previous year. However, it is still lower than the normal area sown for prominent crops. While the overall area sown is higher by 30% compared to last year, it is short of the normal area sown by 1%. This in itself may not be a worry even though the sowing season is coming to an end. While this will certainly help the agricultural growth rate to reach 4%, there are serious concerns on whether this is enough to revive the rural economy, which has been hardest hit by the demonetisation exercise.

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Livemint.com, 8 December, 2016, http://www.livemint.com/Opinion/on308TI8YoOW5Xlr7YGryJ/The-mystery-of-agricultural-growth.html


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