Union Budget 2017: Economic Survey says prices of pulses falling on normal monsoon, buffer stocks

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New Delhi | Published: February 1, 2017 2:02:34 AM

Terming that higher pulses prices which prevailed early last year contributed to higher food inflation, the Economic Survey 2016-17 on Tuesday said prices have started to decline because of normal monsoon, increase in rabi sowing and buffer stocks built up by the government.

The survey stated that it is too early to predict prospects for the monsoon as well as farm production in 2017. (Reuters)The survey stated that it is too early to predict prospects for the monsoon as well as farm production in 2017. (Reuters)

Terming that higher pulses prices which prevailed early last year contributed to higher food inflation, the Economic Survey 2016-17 on Tuesday said prices have started to decline because of normal monsoon, increase in rabi sowing and buffer stocks built up by the government.

“The prices of pulses, in particular tur or urad, remained persistently high from mid-2015 to mid- 2016 due to shortfall in domestic and global supply. Since July 2016, pulses prices except gram dal prices have been declining owing to near normal monsoon, increase in the rabi pulses sowing and buffer build up by the government,” the survey noted.

However it had a note of caution on the possible repeat of pulses-like crisis in other agri-commodities. It urged the government be ‘vigilant’ to prevent spike in prices of items like sugar, milk, potatoes and onion.

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“Vigilance is essential to prevent other agricultural products becoming in 2017-18 what pulses was in 2015-16 in terms of supply deficiencies and consequential higher inflation,” the survey tabled in the Parliament stated.

The survey also stated that sugar prices also firmed up on account of lower production and hardening of price in the international market. “Vegetable prices, which flared during the lean summer season, have also declined sharply as supply picked up during the post monsoon and winter season,” it noted.

The survey stated that it is too early to predict prospects for the monsoon as well as farm production in 2017. “But the higher is agricultural growth this year, the less likely that there would be an extra boost to GDP growth next year,” it noted. The survey has pegged agriculture and allied sector growth at 4.1% this fiscal on account of good monsoon from 1.2% last year but said there is less chance for the sector to give an extra boost to GDP growth next year.

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