As the monsoon season draws to a close, the Reserve Bank said the late revival of rains should brighten prospects for key rabi crops like wheat, allaying to an extent fears over farm growth outlook.
Monsoon, the lifline of Indian agriculture, has revived in last one month but Karnataka, Maharashtra, Gujarat and Rajasthan continue to face deficit rain. The overall monsoon deficit has declined to 7 percent so far, from 22 percent a month back.
While announcing the mid-quarter review of the monetary policy, the RBI said: "With the progressive reduction in the rainfall deficit, kharif sowing, though still below normal, has improved. Reassuringly, the late rains have augmented storage in reservoirs which should improve prospects for the rabi crop, mitigating to some extent concerns about agricultural prospects."
Recently, Agriculture Minister Sharad Pawar had said that deficit rains have impacted sowing of kharif crop and production of coarse cereals and pulses will be affected. However, the revival of monsoon augurs well for rabi crops, he had said.
According to official data, total area under kharif crops is lower by over 1.2 million hectares as on September 14, as compared to a normal year (average of five years), with major fall being in coarse cereals, pulses and oilseeds.
Due to impact of poor monsoon on agriculture, Prime Minister's Economic Advisory Council (PMEAC) had in August pegged farm sector growth at 0.5 percent for the current fiscal, a projection that is even lower than in 2009-10 when monsoon was the worst in 28 years.
The farm sector had expanded at growth rate of 2.8 percent in the last fiscal.