Govt maintains agri growth target at 4% for 12th Plan

The Ministry of Agriculture has proposed to maintain the annual agricultural GDP growth at four per cent for the 12th Plan period starting 2012-13.

“The agricultural GDP may go up higher, which will then get revised during the plan period. But now, when the overall gross domestic product is maintained at nine per cent for the 12th Plan (2012-13 to 2017-2018) agricultural GDP will also be maintained at four per cent, which was the projection for the 11th Plan,” said an official source.

Gross domestic product (GDP) refers to the market value of all final goods and services produced in a country within a given time frame.

While the 12th Plan document is still being prepared, the ministry has recommended coordination with related ministries over the expenditure in agriculture-related services. “The ministry of consumer affairs, in consultation with the planning commission, has sanctioned around Rs 330 crore for revamping food storage facilities which indirectly impacts marketing of agricultural products under the purview of the ministry of agriculture.”

“Almost the entire expenditure for farmers or cooperatives can be clubbed under the nodal scheme of Rashtriya Krishi Vikas Yojana. On the other hand, the ministry of agriculture allocates separately for agricultural marketing schemes. Therefore, the expenses could be planned and coordinated among ministries to reduce overlap,” explained sources.

The Indian Economic Outlook released by the Government of India for 2011-12 pegged India’s GDP growth rate for 2011-12 at 8.2 per cent, compared to 8.5 per cent registered last year. According to the outlook, the agriculture sector, which grew at 6.6 per cent in 2010-11, is pegged to grow at three per cent in 2011-12 if Indian had 90-96 per cent of monsoon rains. Officials say the projection may be revised upwards, given the sharp improvement in monsoon followed by an increase in acreage.

While the plan allocation is yet to be finalised, sources said, greater emphasis will be given on agricultural research. In the 11th Plan, public expenditure on agri- research was increased from 0.7 per cent to 0.9 per cent by the Centre and state governments. The total expenditure on agricultural research currently stands at one per cent of the total agricultural GDP. Besides, they said research priorities will have to shift towards evolving cropping systems suited to various agro-climatic conditions. This would increase yield in rain-fed areas through development of drought- and pest-resistant varieties.

According to Budget 2011-12, while the GDP is estimated to have grown at 8.6 per cent in 2010-11 in real terms, agriculture is estimated to have grown at 5.4 per cent, industry at 8.1 per cent and services at 9.6 per cent. It said a four-pronged strategy covering agricultural production, reduction in wastage of produce, credit support to farmers and a thrust to the food processing sector was worked out to improve agri-GDP. The total allocation of RKVY is being increased from Rs 6,755 crore in 2010-11 to Rs 7,860 crore in 2011-12.

However, the Reserve Bank of India has scaled down its GDP projection for 2011-12 to 7.9 per cent from 8.2 per cent. The growth estimate of agricultural produce has been revised upwards at 3.5 per cent, while the growth rate projections for industry and services have been revised downwards to four per cent and nine per cent, respectively.