Farm sector to grow at a decent 3% in FY21: Niti Aayog

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April 30, 2020 3:20 AM

Agriculture minister Tomar says Rs 18-k cr disbursed under PM-Kisan since lockdown began, to raise share of agriculture-related works under MNREGA to 77% in FY21 from 66% in FY20.

The farm sector has witnessed a roller-coaster ride in recent years, with GVA growth ranging from -0.2% in FY15 to 6.8% in FY17. (File image)The farm sector has witnessed a roller-coaster ride in recent years, with GVA growth ranging from -0.2% in FY15 to 6.8% in FY17. (File image)

The farm and allied sector will likely remain somwhat insulated from the damaging impact of the pandemic and grow at 3% in FY21, contributing about 50 basis points to the country’s economic growth, Niti Aayog member (agriculture) Ramesh Chand said on Wednesday.

Decent expansion of the farm sector will partly soften the blow to the economy, which is ravaged by the Covid-19 outbreak and is widely expected to experience sharply negative growth in the current fiscal.

The gross value added (GVA) in the sector was assumed to have grown 3.7% in FY20, according to the second advance estimate of the economic growth announced by the government in February, before the spread of the novel coronavirus.

In FY19, the sector had witnessed a 2.4% expansion. The farm sector has witnessed a roller-coaster ride in recent years, with GVA growth ranging from -0.2% in FY15 to 6.8% in FY17.

Addressing media, Chand said due to an expected normal monsoon and 40-60% higher water levels at reservoirs from the year-ago levels, the agriculture sector will have a robust growth, compared with other sectors of the economy. The sowing of summer-sown crops at 57.07 lakh hectare, up 38% from the previous year, also indicates that farming have not been majorly impacted by the Covid-19 crisis, he added.

Agriculture minister Narendra Singh Tomar said that rabi-grown oilseeds and pulses harvesting has been completed in all the states while 12% of wheat is yet to be harvested due to late sowing. This indicates that farmers did not have a major issue on labour availability, contrary to “the perception created” about a shortage, Tomar said. Even the sales of fertilisers were up 8% and seeds distributed through Krishi Vigya Kendras (KVKs) rose 20% in April, he added.

“Inconveniences were there, but the Centre has allowed relaxations in all agriculture-related activities which helped ease situation in rural areas,” the minister said, adding about Rs 18,000 crore has already been disbursed to about 9 crore farmers under PM-Kisan after the lockdown was announced. The next crop will be sown in time and the output may be good, considering a normal monsoon as forecast by the India Meteorological Department, Tomar said.

The Centre targets to connect more mandis under the electronic National Agriculture Market (e-NAM) platform to take it to 1,000 by end of May from current 585 level, he said. The government has also been working under a mission mode to distribute Kisan Credit Cards to 2.5 crore eligible farmers, so far left out, out of total 8.5 crore. Any farmer having a KCC can get short-term crop loan upto Rs 3 lakh at subsidised interest rate.

He also said that the government is targeting to raise the share of the agriculture-related works under MNREGA to 77% in FY21 from 66% in FY20. Out of 264 types of works allowed under MNREGA, as many as 162 are related to agriculture, he said and added that all agricultural works could not be accommodated under the job guarantee programme.

On farm-gate prices, the minister said that mandi prices received by farmers are higher than last year. But, he added that the Centre has ensured 50% increase in procurement centres this year to help farmers get the benefit of minimum support prices (MSPs).

According to an FE analysis, average prices of four out of five major rabi crops — wheat, chana, mustard and barley — were up to 15% below their MSPs during April 1-27. In states where the mandi arrivals are higher, the prices of these crops were lower than the all-India average rates.

Former chief economic advisor Arvind Subramanian had on Tuesday said that India should plan for “substantially negative economic growth” this financial year due to the coronavirus crisis and that the government should tap various sources to finance a Rs 10 trillion stimulus. He also expressed the view that International Monetary Fund’s (IMF) estimate for India’s GDP growth in FY21 might turn out to be a serious overestimate. The IMF this month cut its India growth forecast to 1.9% for FY21 from 5.8% projected in January, even as it predicted a 3% contraction for 2020 global GDP, warning that the Covid-19 outbreak has plunged the global economy into its worst recession since the Great Depression in 1930s. However, economic expansion for India will likely rebound to 7.4% in the next fiscal, the Fund said.

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