Drought In The Realm Of Ideas

Written by Saumitra Chaudhury | Updated: Aug 26 2002, 05:30am hrs
Four Mondays back, on the back of the driest July in memory, this column argued for an end to the rising lament on the weak monsoon. It may seem a long time ago, but surely you remember the grim prospects of starving millions that some in government, some outside, and sections of the media were sensationalising. Indias premier cartoonist conjured up powerful images of famine that many real famines have etched into our collective memory. From a holocaust of the nuclear variety, to one of another kind; a swift transition for the panic prone. The cogs of competitive politics and babudom fell in line. The collective claims for drought relief lodged by states with the Centre aggregate Rs 20,000 crore. If we are real good at one thing, surely that is in generating realms of paperwork based on the flimsiest of facts.

A wet August has intervened. The pipers tune has been ignored, though it is unlikely that good sense and superior thinking was the cause. More probably, it was the slew of scandals that diverted the attention of the politician and media. Who knows otherwise the latter part of the monsoon session, instead of talking petrol pumps, might have witnessed vociferous competition amongst our most honourable elected representatives trying to establish that their heart was not always in their pockets, but where it ought to be. Namely, with the helpless starving millions crawling upon baked earth, so poignantly described by generations of our novelists, an image that continues to live contemporaneously in the misinformed mind of the urban do-gooder. Whatever may be the case, prima facie it could be argued that the petrol pump scandal saved the exchequer plenty of money. Once again, an example of the utility of venality in public life!

Time perhaps to do some stocktaking. In the first quarter of this fiscal (April-June), industrial production was up 4 per cent double the growth in the corresponding period last year. Consumer non-durables, basic and capital goods have done well. Basic chemicals, metals and transport equipment have registered strong gains. Output of crude oil, coal, power and fertiliser have expanded far more strongly this year. Exports were up 12 per cent, driven by textiles, engineering goods, chemicals and apparel the principal contributors to export growth through the nineties. Software exports were up 14 per cent and merchandise imports expanded by 4 per cent. Traffic in our major ports grew 13 per cent and railway freight movement increased 5 per cent. The flow of banking finance to commerce and industry is much higher this year than in the last, and foreign direct investment inflows continued to expand.

But what about agriculture In the absence of any official report, a private agency (CMIE) has it that sown area is down by as much as half for foodgrains, from which a reduction of 12 million tonnes in foodgrains is forecast, with smaller declines in oilseeds and cotton. There is however, a hiatus between what is being said by state government officials on the one hand (in line with the fabulous bills on the calamity fund), and reality on the ground. Rice would surely be down, pulses and coarse cereals might actually go up, and oilseeds remain at last years level. Overall, there would surely be a decline from last years record kharif harvest, but nowhere near bringing economic growth down to 3.1 per cent, as CMIE expects.

More likely, this fiscal would close with growth in the region of 5 per cent. Then, the good August rains and prospects of its extension into September create conditions for soil moisture conducive to a strong rabi turnout. Now that the farce of predictions, first of a "normal" monsoon, and then, calamitous drought with gravest of fiscal and economic consequences, has been played out, all the players ought to learn some lessons. The official system to monitor environmental and crop data is both woeful and awful. Agriculture in India has come a long way and is far more resilient than it is given credit for, and in any case it is not the prime engine of economic growth.

The author is economic advisor to ICRA (Investment Information and Credit Rating Agency)