Farm sector to clock 3.4% growth

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8 January 2021, New Delhi, IN: Gross Value Added (GVA) in agriculture and allied activities is expected to grow at 3.4 per cent at constant prices in financial year 2020-21 (FY21), according to the first advance estimates.

This is slightly lower than last year, but the best among all sectors of the economy, which has been battered by the Covid19 pandemic.

At current prices, GVA growth in agriculture and allied activities is expected to be around 7.3 per cent in FY21, which is slightly lower than the 11.4 per cent estimated for FY20.

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This means that inflation impact will be around 3.9 per cent in FY21, lower than the 7.4 per cent in FY20 according to the estimates, released by the Ministry of Statistics and Programme Implementation (MOSPI) on Thursday.

Agriculture is among the few sectors expected to clock growth in FY21, and is expected to grow the most, reflecting farmers´ contribution during the lockdown in not only venturing out to their fields but also in producing record amount of goods.

However, given the relatively smaller share of farming in the economic pie, this isn´t expected to give a big push to overall gross domestic product (GDP), but it does have a positive spin off on the 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 that have clocked positive growth rates this year,” said DK Joshi, chief economist at CRISIL.

According to the first estimate, India´s kharif foodgrain production in FY21 is expected to be a record 144.52 million tonnes ( MT), which is 0.80 per cent more than the production in FY20.

Rice production is estimated to be 102.36 MT, which is 0.37 per cent higher than FY20.

Pulses production is expected to be around 9.31 MT, about 21 per cent more than FY20, and oilseed output is expected to be 25.72 MT, which is 15.28 per cent more than the FY20.

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

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

It isn´t just the monsoon that was good, even the winter rains that 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 corresponding period last year.

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