"We recommend the government to immediately announce steps to control food inflation in view of the impending El Nino and the cascading negative affect it will have on crop production," Assocham President Rana Kapoor said.
"The government needs to make some key announcements on supply side management, logistic management, including warehousing, and implement changes in the Agriculture Produce Market Committee (APMC) Act to curb hoarding," he added.
After four years of normal and above-normal monsoon, India is expected to have below normal monsoon this year with rainfall projected to be 95 per cent, a news which is disappointing for the farming community.
About 60 per cent of net sown area of the country is rain-fed. The deficit rainfall of 5 per cent due to El Nino factor will cause loss to the GDP of about 1.75 per cent, i.e. Rs 1.80 lakh crore, which in turn will hurt lakhs of unskilled jobs, according to Assocham.
With every one per cent deficit in rains, the country's gross domestic produce (GDP) falls by 0.35 percent, it added.
Officials in the weather department earlier said the monsoon is expected to be below normal because of El-Nino effect, which is generally associated with the warming of ocean water.
The outlook for agriculture is clouded by the meteorological department's forecasts of a delay in the onset of the south-west monsoon with a 60 per cent chance of the occurrence of El Nino," RBI Governor Raghuram G Rajan said in a second bi-monthly monetary policy statement yesterday.