Containing soaring food prices being the government's primary concern now, Finance Minister Pranab Mukherjee on Friday initiated his customary pre-budget consultation series with a meeting with various agricultural stakeholders and expressed the hope that the farm and allied sector would mark a significant recovery to grow by 6 per cent this fiscal.
Pre-budget discussions
Initiating the discussions with delegates at the meeting, which included farm sector economist and Asia Director of International Food Policy Research Institute (IFPRI) Ashok Gulati and farmers' leader Sharad Joshi, Mr. Mukherjee exuded optimism over sustained growth and said: “In the current year with normal monsoons, we are looking at a significant rebound in agriculture and allied sector growth at about 6 per cent.”
Even as the agriculture and allied sector comprising forestry, fishery and poultry notched up a growth of 3.8 per cent during the first half of 2010-11 fiscal, up from a paltry one per cent a year ago, mainly owing to a good monsoon, the benefits did not percolate down to the consumer as food inflation exceeded 18 per cent for the week ended December 18 following a surge in the prices of vegetables, fruits, milk, fish and poultry products.
Mr. Mukherjee pointed out that the farm sector had a long agenda on what is required to be done even as some of the strategies put in place earlier have started yielding results. The sector has to achieve an annual growth of four per cent for attaining and sustaining double digit overall economic growth.
“There is much that needs to be done to accelerate the pace of growth in agricultural sector.
Already, some good results have been observed in respect of production of pulses in the current year,” an official statement quoted Mr. Mukherjee as saying.
During the discussions, Mr. Gulati expressed the view that the Reserve Bank of India (RBI) should further tighten the monetary policy to tame food inflation. “There is excess liquidity in the system and that needs to be tightened,” he said.
He felt that barring onions, there was adequate availability of fruits, milk and other vegetables. The problem was the huge wastage owing to lack of cold storage and other infrastructure which require attention.
For raising farm productivity, the IFPRI suggested higher allocation of funds for research and development and public-private partnership in seeds.
The Consortium of Indian Farmers Association (CIFA), on its part, urged the government to encourage farm mechanisation by waiving taxes on farm equipment such as harvesters and excise duty on tractor tyres. It also suggested foreign direct investment in seed, biotechnology and pesticides besides incentivising allied sectors like aquaculture, dairy, poultry and horticulture.
Farmer leader Sharad Joshi urged the Finance Minister to consider the grant of 80 per cent subsidy on light tractors and a hike in import duties on crude and refined edible oils.
