For the current fiscal year, the first-quarter GDP figures indicate that the economy contracted by 23.9 per cent year-on-year. Many observers and analysts contrasted this over the same time with the US economy contracting by approximately 32 per cent. But that number is the annualized average, seasonally adjusted. The comparable figure is -54 per cent for India. Our economy is clearly on a poor footing no matter what the figure.
Rural India is currently being hailed as the saviour of India’s growth storey, supported by agriculture. Rural India represents nearly 47 per cent of GDP. So far, the south-western monsoon has been good, with only the north-western part of the country receiving less than normal rainfall. Sowing in Kharif is up from last year. Even the MSPs are up from last year for the current marketing season.
MSP is only available for Government procured production. This year, the government is targeting 40 million tonnes of wheat procurement — nearly 40 per cent of wheat production in India. Or, if production is still exposed to market forces, the remaining 60 per cent. Instances of lowering mandi prices under the MSP are not unheard of. Also, wheat and rice are the priorities of government procurement. Though 59 percent and 39 per cent of farmers grow wheat and rice, there is no such guaranteed demand for those growing other crops. Experts also identified other issues related to making MSP open to smallholder farmers.
The government has declared that its procurement would increase, thereby ensuring MSP for a greater share of agricultural products. In rural areas, labour is plentiful due to reverse migration. Sales of tractors and fertilisers stayed safe. MGNREGA has seen the government allocating more money. The Center announced packages of help for rural people that included free rations, accelerated payment under PM-KISAN, and Garib Kalyan Rojgar Abhiyaan. Many states have supplemented it with their packages and strategies to support the migrants returning to rural areas.
Despite high expectations, over the first quarter, the agricultural sector posted a 3.4 per cent rise. Although this was the only silver lining in the release of results, 3.4 per cent is not an impressive figure. Many analysts predicted that it will be close to 5%. Recently, the Government has implemented measures to help the agricultural sector. These initiatives aim at allowing broader market access for farmers, promoting contract farming, and improving supply chain infrastructure. While these have already occurred in one way or another under the current system, the changes would only promote better and faster progress.
