Farm output shortfall to hit GDP, says Ficci

 India’s economy is expected to grow between 5.2-5.8 per cent in 2009-10, much lower than last year as the agriculture output is estimated to decline significantly because of drought in 276 districts of the country, an industry paper has said.

The GDP projections for the current fiscal made by the Federation of Indian Chambers of Commerce and Industry (Ficci) are far dismal than the estimates of 6 per cent by RBI and 6.3 per cent by the Planning Commission.

Its projections are close to the assessment made by the International Monetary Fund (IMF) about the Indian economy. According to the IMF, India’s GDP is expected to grow by 5.4 per cent in 2009. Below normal rain to the extent of 20 per cent this year, the worst in 37 years, has led to drought in 44 per cent of India’s 626 districts, Ficci said.
“The overall Kharif output is expected to dip by 15 per cent and this may translate into a lower GDP of 5.2-5.8 per cent versus 6.7 per cent last year,” it said adding the agriculture output may drop by 2-4 per cent.

Quoting the US Department of Agriculture, Ficci said India’s rice output is expected to fall sharply to 82 million tonnes in 2009-10 against an early forecast of 88 million tonnes.  Agriculture Minister Sharad Pawar had also forecasted a 10 million tonne drop in rice production during the Kharif season because of the drought. The projected damage for Kharif (summer crop) has been severe up to 20 per cent. Ficci said that projections for rice in Kharif season is estimated at 30.87 million hectares till September 10, which is 6.2 million hectares short of last year’s corresponding position.

On pulses, it said crops have been grown on about half a million additional area and reports of sowing are still coming in.

The chamber said that as on September 17 this year, cotton has been grown on about 9.61 million hectares, up 1.13 million hectares from last season’s 8.48 million hectares.
Ficci has suggested to the government a long-term strategy that ensures total food security by bringing more area under irrigation, advanced forecasting systems and steps to speed up farm mechanisation.