Staring down Covid, agri among few sectors to grow in FY21 in arid economy

Agriculture is the only sector expected to clock a positive growth in 2020-21 as per the estimates released by MoSPI

Gross Value Added (GVA) for agriculture and allied activities is expected to grow at 3.4 per cent at constant prices in the financial year 2020-21, lower than last year but the best growth among all other sectors battered in the Covid-19 pandemic.

At current prices, GVA growth in agriculture and allied activities is expected to be around 7.3 per cent in 2020-21, which is slightly lower than the 11.4 per cent estimated for 2019-20.

This means that inflation impact will be around 3.9 per cent in 2020-21, lower than the 7.4 per cent in 2019-20 as per the first advanced estimate.

Agriculture is the only sector expected to clock a positive growth in 2020-21 as per the estimates released by statistics ministry on Thursday along with electricity, gas and water supply and the highest among all the sectors, reflecting the stellar role that farmers played during the lockdown months to not only venture into their fields but also produce farm goods in record amounts.

 

However, given the smaller share of farming, a positive growth isn’t expected to make a big push to overall GDP, but it does have a positive spinoff impact on the broader rural economy.

“The 3.4 per cent growth estimated by MoSPI for agriculture and allied activities though slightly lower than last year is near the long-term average for the sector which is 3-4 per cent and among few sectors which have clocked positive growth rates this year,” said DK Joshi, chief economist at Crisil.

India’s kharif foodgrains production in 2020-21 as per the first estimate is expected to be a record 144.52 million tonnes, which is 0.80 per cent more than the production in 2019-20.

In foodgrains, rice production is estimated to be 102.36 million tonnes, which is 0.37 per cent more than 2019-20.

The production of pulses is expected to be around 9.31 million tonnes, which is almost 21 per cent more than 2019-20.

The output of oilseed is expected to be 25.72 million tonnes which is 15.28 per cent more than the 2019-20.

 

The data also showed that production of cotton is estimated to be 37.18 million bales (1 bale = 170 kilograms) which is almost 5 per cent more than last year, while sugarcane production is estimated to be 399.83 million tonnes, which is 12.41 per cent more than last year.

Production of kharif crops is expected to be good due to strong southwest monsoon which in the June to September season was 109 per cent of the Long Period Average in 2020 which was 9 per cent more than normal.

Not only the monsoon was good this year, even the winter rains which followed the monsoons have been 1 per cent above normal which has spurred a strong rabi sowing as well.

Rabi crops have been sown in around 62.07 million hectares till January 1, which is 1.75 million hectares more than the same period last year.