‘Green shoots of economic revival seen across sectors’: Finance ministry

The finance ministry on Tuesday said the agricultural sector would be the foundation of the country’s economic growth and “early green shoots” of economic revival are visible with pickup in agricultural procurement, fertiliser sales, energy consumption, freight movement, digital transactions and forex earnings. “Agricultural sector remains the foundation of the Indian economy and with a forecast of a normal monsoon, it should support the rebooting of the Indian economy,” it said in a statement. Procurement of wheat from farmers by government agencies has been a record 382 lakh metric tonnes (LMT) as on June 16, which surpassed the earlier record of 381.48 LMT in 2012-13. “This has been accomplished during the trying times of Covid-19 pandemic under the social distancing restrictions. Forty two lakh farmers have been benefited and a total amount of Rs 73,500 crore has been paid towards to them minimum support price (MSP) for wheat,” it added. Similarly, procurement of minor forest produces (MFP) in 16 states has hit a record Rs 79.42 crore. Besides, farmers have sown 13.13 million hectares of Kharif crops till June 19, which is 39% higher than that the corresponding period last year, with a big jump in area covered under oil seeds, coarse cereals, pulses and cotton, it said. Fertiliser sales, another indicator of farm sector growth, have also surged by almost 98% year-on-year in May 2020 to 40.02 lakh tonnes, reflecting a robust agricultural sector, it said. “Though the GDP [gross domestic product] contribution of the sector may not be very large (compared to industry and services), its growth has a very positive impact on the large population dependent on agriculture,” the finance ministry said. According to the latest official data, India’s GDP grew 4.2% in 2019-20, the slowest in 11 years on the back of falling investment and consumption. In the financial year, agriculture and allied activities recorded a 4.0% growth compared 2.4% in the previous fiscal year. The industrial sector, however, posted a muted growth of 0.9% in FY20 from 4.9% in FY19, and the services sector also slowed to 5.5% in 2019-20 compared to 7.7% in the last financial year. DK Srivastava, chief policy advisor at consultancy firm EY India, said early economic indicators raise possibilities that extremely pessimistic GDP growth forecasts in FY21 for the country “may be belied”. “While growth in manufacturing and services is likely to be negative in 1QFY21, the Indian economy may turn into positive growth territory 2QFY21 onwards. This is reflected by important leading indicators such as electricity and petroleum consumption. These early trends indicate that there is a good chance that the GDP growth may turn out to be positive although at a low level in FY21 if the pick-up is strong particularly in the third and fourth quarters of the fiscal year,” Srivastava added.


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