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Agriculture sector growth likely to be higher than CSO estimate of 2.1%, says ministry

New Delhi: The country's agriculture sector is expected to grow higher than projected 2.1 percent growth by the Central Statistics Office (CSO) for the current fiscal, following better Rabi crop prospects, the agriculture ministry said.

Last week, CSO had pegged farm and allied sector growth at 2.1 percent for 2017-18, much lower than 4.9 percent achieved in the 2016-17.

 Agriculture sector growth likely to be higher than CSO estimate of 2.1%, says ministry

Representational image. Reuters

The farm sector growth comprises gross value added (GVA) of crops at 60 percent, livestock 20 percent and forestry 8.5 percent and fishing and aquaculture at 5.5 percent.
"The ministry is optimistic about achieving a high growth rate because the Rabi, 2017 is showing a very good performance in addition to good Kharif, 2017," the ministry said in an official statement.

The agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released, it added.

Justifying the reasons for possible higher growth, the ministry said it is of the opinion that the lower coverage of the area by August 2017 on account of the delayed onset of monsoons has caused a poor reflection compared to the actual positive field situation by December 2017.

However, good rainfall thereafter helped increase in area coverage in accordance with the with Kharif targets.

"Despite delay in the onset of monsoons and relatively poorer rainfall vis-a-vis the previous year, the area coverage under Kharif finally rose to 106.55 million hectares against the five year average of 105.86 million hectares," it said.

It is, hence logical, that the computation based on area coverage under crops as in August 2017 had a negative impact on the CSO's advance estimate for the overall agriculture sector.

The GVA estimate is bound to get corrected upwards, if increased area coverage by December 2017 and concomitant production estimate in case of foodgrains, oilseeds, and commercial crops, in particular, are taken into account, it said.

These three account for a higher percentage of share than horticulture in the GVA computation and horticulture is showing a higher productivity estimate, it added.

The ministry further said the livestock and fishery sector was very positive till August 2017 and by December the dominant crop sector has "bounced back".

"If this amended and actual field situation is taken into account in the computation of the GVA for agriculture sector as a whole, its growth rate can be estimated to be much higher than the advance estimate of 2.1 percent," the ministry said.

Stating that the rabi prospects are good, the ministry said rabi crops have been covered in an area of 58.6 million hectares which is a "very good progress".

Considering that the Rabi sowing continues up to the first week of February, the total area under crops and resultant production will be very good, it added.

The ministry also observed that CSO estimates of farm sector growth this fiscal come on the back of a very robust GVA of 4.9 percent in the previous year.

"Considering that crop segment constitutes a dominant component of the GVA computation, its performance is very critical. However, with in elasticity of land where there exists little scope for increase in the average coverage, productivity enhancement assumes importance," it said.

Crops in particular and agriculture, in general, are highly dependent on monsoons and the overall status of weather, the ministry said, adding that even small variations in weather tend to influence agriculture adversely, as seen for example, in the area coverage by August 2017.

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Updated Date: Jan 12, 2018 12:11:22 IST

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