Here’s why Shaktikanta Das calls agriculture a beacon of hope in a falling economy
RBI Governor Shaktikanta Das called agriculture and allied services as the beacon of hope in the middle of the coronavirus crisis. He said that amidst the encircling gloom, agriculture and allied activities have provided a beacon of hope on the back of an increase of 3.7 per cent in foodgrains production to a new record. The RBI Governor added that the forecast of a normal southwest monsoon in 2020 by the India Meteorological Department (IMD) has also given hope for improved agricultural output. However, it is not the first time when the agriculture sector has been considered as the rescuer of the falling Indian economy.
Even as most of the economic activities have witnessed a major fall in their operations, the agri sector is mostly unaffected from the lockdown and is expected to grow by 3 per cent this year. It is estimated that the agri sector alone will give over 0.5 per cent growth to the overall economy and thus there is no grounds to say that the overall economy will contract in the current fiscal, NITI Aayog member and agricultural policy expert Ramesh Chand said in a press conference last month.
The strong assurance from better than expected monsoon, 40-60 per cent higher water availability in the reservoirs, and 5 per cent higher offtake of fertiliser during the first four months of this year are the major signs indicating a bumper production this year. Adding to it, 20 per cent increase in the sale of seeds and high food prices show a better term of trade and more encouragement to the farmers to produce.
By May 10, kharif sowing was higher by 44 per cent over last year’s acreage and rabi procurement is in full flow in respect of oilseeds, pulses and wheat, benefiting from the bumper harvest. These developments will support farm incomes, improve the terms of trade facing the farm sector and strengthen food security for the country, also, these would have a salutary effect on food price pressures further, RBI said in its statement today.
Meanwhile, Finance minister Nirmala Sitharaman has announced nearly Rs 1.5 lakh crore package for agriculture and allied sectors aiming at strengthening infrastructure, logistics and capacity building at farm gate. The government has also rolled out reforms for the farm sector including a new central law to allow farmers to sell their produce freely and get better prices. The Essential Commodities Act is also amended to deregulate trade in cereals, edible oils, oilseeds, pulses, onion and potato.