With 3% growth this year, India’s agriculture output will be a lone bright spot for economy

Indian economy is headed for a rare annual contraction as 40-day lockdown to prevent coronavirus spread effectively puts a lid on consumption.

Agriculture in Odisha
A farmer carries dried grass between paddy fields in Odisha (representational image)

New Delhi: India’s agriculture output is seen growing faster than expected in the current financial year, emerging as the lone bright spot at a time when the coronavirus pandemic is taking out the economy’s growth engines one after another.

Farm sector growth will top 3% in the year started April 1, Ramesh Chand, an adviser to Prime Minister Narendra Modi, said in a telephone interview on Monday. The sector is expected to have expanded 2.8% last year and 2.9% the year before.

“Agriculture growth rate this year will be intact,” said Chand, a member in government think-tank NITI Aayog. “In fact, agriculture will be a big support to an otherwise sagging economy.”

Asia’s third-largest economy is seen headed for a rare annual contraction, as a more than month-long lockdown to prevent the virus’s spread effectively puts a lid on consumption — which makes up about 60% of India’s gross domestic product. On Wednesday, the country’s weather office said annual monsoon rains, crucial for the farm sector as it not only waters some crops directly but also fills reservoirs that help irrigate winter-sown crops, will be normal.

Chand’s comments mark the first assessment of the farm sector, which employs about 800 million people directly or indirectly, and accounts for less than a fifth of the national output. Agriculture and its related activities will remain fully functional, the government said in an order that relaxed rules for some sectors to resume operations after April 20.

While there are concerns about the lockdown leading to a manpower crunch as migrant labor headed back to their villages, Chand said about 80% of wheat harvesting in the country is mechanized. Major wheat producing states such as Punjab and Haryana have increased the number of procurement centers and there are proposals to extend the period of procurement too, he said.

“Problems of this kind may be in some minor crops but not in major crop like wheat,” Chand said. “What is happening to some vegetables and fruits, is not going to happen in wheat.” – Bloomberg

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