02-08-2007, 11:22 PM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Farm news is bad </b>
The Pioneer Edit Desk
<i>Low growth means bad times ahead</i>
The Central Statistical Organisation's overall projection for the economy's growth, pegged at 9 per cent, has triggered the popping of champagne corks in corporate circles. <b>But it would be wrong to ignore a less flattering remark tucked deep in the CSO's statement which unequivocally states that the growth in the farm sector is likely to be only 2.7 per cent - or substantially down from last year's achievement of 6 per cent. Nobody can deny that an economy relying on just the manufacturing and services sector to produce wonders will, before long, run out of steam</b>. The first half of the fiscal year witnessed a magical 9 per cent real GDP growth on an annual basis. This strong growth has been achieved on account of the good performance by the manufacturing and services sectors. Agricultural growth, on the other hand, has not been impressive, primarily reflecting the poor production conditions of the previous year's monsoon. The GDP from agriculture and allied sectors has increased by 2.5 per cent during the first two quarters over the corresponding period of 2005-06 as compared to a growth of 10 per cent or more in the case of industry and services. The growth story has, therefore, been in industry and services. At the sectoral level, agriculture has had to contend with an erratic monsoon. There were periods of both deficient and excessive rainfall during the four-month-long monsoon. Across the regions, too, the experience was uneven - while the north and south had rainfall which was less than the long-term average, rainfall in the east and west was above the long-term average. Rainfall in the post-monsoon period of October-December was less than the long-term average for the period. Thus, the growth of agriculture is likely to be lower than in the previous year when real GDP from this sector increased by 3.9 per cent. The production of foodgrain has consistently fallen below the targets fixed by the Government at the beginning of the crop season in each of the last four years.
Politically, adverse results from the farm sector mean bad news for any Government.<b> The Congress, locked in fierce electoral battle in Punjab and Uttarakhand, is desperate to hide the reality. </b>But the cascading effect of a sick farm sector on prices cannot be hidden. The Prime Minister has never been economical with promises to turn the situation around. But his grand-standing and populist announcements are not taking the country anywhere. On the contrary, a <b>steep decline in the farm sector's growth, along with high prices of essential commodities, can ultimately strike a severe blow against India's ambitious plans to emerge as a global power. Falling foodgrain production and an ever-increasing population together could make the Malthusian nightmare come true</b>.
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The Pioneer Edit Desk
<i>Low growth means bad times ahead</i>
The Central Statistical Organisation's overall projection for the economy's growth, pegged at 9 per cent, has triggered the popping of champagne corks in corporate circles. <b>But it would be wrong to ignore a less flattering remark tucked deep in the CSO's statement which unequivocally states that the growth in the farm sector is likely to be only 2.7 per cent - or substantially down from last year's achievement of 6 per cent. Nobody can deny that an economy relying on just the manufacturing and services sector to produce wonders will, before long, run out of steam</b>. The first half of the fiscal year witnessed a magical 9 per cent real GDP growth on an annual basis. This strong growth has been achieved on account of the good performance by the manufacturing and services sectors. Agricultural growth, on the other hand, has not been impressive, primarily reflecting the poor production conditions of the previous year's monsoon. The GDP from agriculture and allied sectors has increased by 2.5 per cent during the first two quarters over the corresponding period of 2005-06 as compared to a growth of 10 per cent or more in the case of industry and services. The growth story has, therefore, been in industry and services. At the sectoral level, agriculture has had to contend with an erratic monsoon. There were periods of both deficient and excessive rainfall during the four-month-long monsoon. Across the regions, too, the experience was uneven - while the north and south had rainfall which was less than the long-term average, rainfall in the east and west was above the long-term average. Rainfall in the post-monsoon period of October-December was less than the long-term average for the period. Thus, the growth of agriculture is likely to be lower than in the previous year when real GDP from this sector increased by 3.9 per cent. The production of foodgrain has consistently fallen below the targets fixed by the Government at the beginning of the crop season in each of the last four years.
Politically, adverse results from the farm sector mean bad news for any Government.<b> The Congress, locked in fierce electoral battle in Punjab and Uttarakhand, is desperate to hide the reality. </b>But the cascading effect of a sick farm sector on prices cannot be hidden. The Prime Minister has never been economical with promises to turn the situation around. But his grand-standing and populist announcements are not taking the country anywhere. On the contrary, a <b>steep decline in the farm sector's growth, along with high prices of essential commodities, can ultimately strike a severe blow against India's ambitious plans to emerge as a global power. Falling foodgrain production and an ever-increasing population together could make the Malthusian nightmare come true</b>.
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