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PM discusses situation with Plan and Finance panels
Pranab admits to drop in food production
New Delhi, DH News Service:
Finance Minister Pranab Mukherjee on Tuesday cautioned that the food production in the current fiscal might go down with the sowing of crops registering a 20 per cent reduction than in the previous year owing to weak monsoon.
“Monsoon situation is still erratic. As many as 161 districts have been declared drought-prone. The sowing (of crops) is already down by 20 per cent,” he told newspersons here on Tuesday.
With the threat of drought looming large, the finance minister’s statement underscored the growing concern of the government that a weak monsoon could reduce the country’s agro output, including food-grain production, and adversely affect the economic growth already hit by the global slowdown.
What is still alarming is that the reduction in food production would further increase the prices of basic food items.
With the rainfall declining by 28 per cent so far this year, there is growing apprehension that the country might face a drought condition similar to that of 2004, when kharif crop output fell 12 per cent after a drought.
However, Mukherjee said: “There is no need to press the panic button as the government will take adequate steps to meet the challenge if such a situation arises.”
Contingency plan
He said the government was ready to deal with the drought. A contingency plan is also in place.
“We have faced the century’s worst drought in 1987. But we faced the challenge with determination. A country of India’s size and dimension has the basic inherent strength to face any situation,” he said.
Asked about the country’s growth prospect in the face of the emerging drought situation, the finance minister said he was in agreement with the Reserve Bank’s growth projection of 6 per cent and above for the current fiscal.
The growing threat of an approaching drought is now engaging the government’s attention at the highest level as the prime minister held a meeting late on Monday with the 13th Finance Commission Chairman Vijay Kelkar and Planning Commission Secretary Sudha Pillai to discuss the drought situation in the country.
The meeting assumed importance as the government was planning to provide more resources to states to battle the impact of poor monsoon on kharif crop and rise in the prices of essential commodities. While the Planning Commission is involved in allocation of resources towards schemes, the Finance Commission primarily deals with guidelines for sharing of revenues, collected by the Centre, with the states.
Grim picture
* As many as 161 districts have been declared drought-prone *Sowing of crops already down by 20 per cent *Reduction in food production may trigger price rise of basic food items *Govt ready with contingency plan to manage a drought, says FM *Govt in agreement with RBI’s projection of 6 per cent growth rate
Grim picture
