Kharif crop output to fall 15-20%: FM

Finance Minister Pranab Mukherjee said the production of Kharif or summer crop would decline by 15-20 per cent, as 252 districts in 10 states are drought-hit.

Till August 21, the government had declared that 246 districts were affected by drought. Mukherjee said, given the situation, the drought would have only marginal effect on central procurement, as the government was able to contain the effects of drought in Punjab and Haryana.

“I have been told that the yield in these states will not be affected due to drought and it is important from the central procurement point of view, as 65 per cent of wheat and 30 per cent of rice procurement is done from these states,” Mukherjee said in an interaction with industrialists in an event organised by the Federation of Indian Chambers of Commerce and Industry (Ficci).

He said the government would have 1.77 million tonnes of wheat available by April 1, 2010, and 1.37 million tonnes of rice by October 1, 2009.

“Whatever is lost is lost, we will now concentrate on an early rabi sowing and cultivation of fodder and short-cultivation crops to contain the adverse effects of drought. We will augment supply through imports if there is need for that,” he added.

The minister assured the industry representatives that the government was sensitive to the cause of industry and would take steps to contain inflationary pressures and monitor government borrowing so that it did not crowd out private investments.

Meanwhile, concerned over spurt in prices of essential commodities, All India Congress Committee President Sonia Gandhi has written a letter to Prime Minister Manmohan Singh amid demands from the party that the government take concrete steps to check the price line.

The letter was written before the Congress Working Committee (CWC) meeting on August 19, when the highest-policy making forum had discussed the issue of drought in several parts of the country and resultant price hike, party sources said today.