RBI projects zero growth in farm sector output

The Reserve Bank today said the agriculture growth will be muted this fiscal on account of the impact of poor monsoon on kharif crops.

"As rabi prospects appear to be better, on the whole, agricultural GDP growth in 2009-10 is expected to be near zero," RBI Governor D Subbarao said while announcing third quarterly review of the monetary policy.

Subbarao added that the poor kharif output, on account of deficient monsoon, might also drag the real GDP growth for the third quarter of the current fiscal to below 7.9 per cent recorded in the previous quarter.

"It is expected that Q3 growth, which will reflect the full impact of deficient south-west monsoon rainfall on kharif crops, would be lower than that of Q2," RBI said.

The agricultural growth in the second quarter of the current fiscal was 0.91 per cent. In the entire 2008-09, the growth was at 2.6 per cent.

Agriculture sector contributes 17 per cent to the national income, though more than half the population depends on farm sector.