Monsoon revival aids farm sector growth

Concerns about the outlook for the kharif crop have abated with monsoon rains picking up in August. Indeed, sowing is almost complete and the area under summer crops is only three per cent lower than last year. The gap was 27 per cent on July 25.

The kharif season accounts for almost half of the agricultural output, and the monsoon's revival is significant because it was the farm sector that supported sagging gross domestic product (GDP) growth in 2013/14. Manufacturing and mining growth slipped last fiscal year due to the policy paralysis of the previous United Progressive Alliance government. GDP grew 4.7 per cent in 2013/14, with the farm sector expanding at the same pace.

While manufacturing and mining have moved back into the positive territory in the first quarter of this fiscal year thanks to improved business sentiment under the Narendra Modi government, there were concerns about the impact of poor rains on the economy. The situation looks better now.

The government expects GDP to grow by 5.7 to 5.9 per cent in 2014/15. Robust farm growth can contain inflation, support industry and services, and increase job opportunities in rural India. PK Joshi, South Asia Director at International Food Policy Research Institute, says the farm sector will grow this year as well though the pace may slow down.

The India Meteorological Department estimates rainfall this year to be 13 per cent lower than normal. The deficit in northwest India, with states like Punjab, Haryana, Rajasthan and Uttar Pradesh, was 34 per cent until August 27. But Haryana and Punjab are well-irrigated and that will mitigate the impact of a suboptimal monsoon.

Data from the agriculture ministry shows that paddy was sown on 36 million hectares by early September, marginally lower than last year. Pulses were sown on 9.72 million hectares against 10.36 million hectares in 2013 while oilseeds were sown on 17.34 million hectares compared with 18.89 million hectares last year.

Cotton has been sown on 12.37 million hectares, higher than 11.31 million hectares in 2013. "Crops like pulses and coarse cereals will attain the required growth," says J. S. Sandhu, Agriculture Commissioner in the Ministry of Agriculture, who has set out on a tour to evaluate crop prospects in states. "There will be negligible impact of delayed sowing."