Agri growth may decline to 2%: PM council

Agricultural growth is likely to slow down by more than a half in 2008-09, mainly triggered by scanty rainfall in some parts of the country during July.

"We project that GDP originating in agriculture and allied activities is likely to grow by 2 per cent in 2008-09, less than what it has done in the previous three years," the prime minister's economic advisory council said in its economic outlook for this fiscal.

In 2007-08, the farm sector growth stood at 4.5 per cent, while it was 3.8 per cent and 5.9 per cent in 2006-07 and 2005-06, respectively.

The report, which was released on Wednesday by outgoing council Chairman C Rangarajan, said the lower growth projection is in part due to the base effect of very high growth in 2007-08 and the weak South-West monsoon over peninsular, central and western India in July.

Pointing out that weak rainfall in July generally has adverse implications for the Kharif crop, the report said the resumption of rain since last week

of July in the affected areas has the potential of significantly limiting crop damage.

"...we expect that Kharif foodgrain and oilseed output may be at about the same level as last year, while there may be some expansion in the Rabi harvest," it said.

Foodgrain production in Kharif 2007-08 stood at 120.96 million tons while oilseeds output was 19.84 million tons, according to the government fourth advance estimate.

The trend of rapid growth in horticulture and animal husbandary is expected to continue in this year as well, the Council noted.

The report cautioned that if farm production is hit because of adverse weather conditions, food prices may come under pressure.

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