Cauvery crisis casts its shadow on economy too

Chennai Nov. 13. Karnataka's refusal to release Cauvery water has played havoc not only with the lives of thousands of delta farmers, but the entire Tamil Nadu economy.

Going by official projections, the growth rate in the primary agriculture sector is certain to plunge into the negative territory— an alarming minus 8.39 per cent— in the current financial year.

And, if the manufacturing and service sectors do not show a sharp up trend in the coming months, Tamil Nadu, for the first time in several years, will end up with a negative growth in its Gross State Domestic Product.

With the Cauvery not flowing into Tamil Nadu in time, the agriculture sector, which contributes to 16.65 per cent of the State economy, is in the doldrums, as the short-term kuruvai cultivation had to be abandoned on over 1.2 lakh hectares of land and the long-term samba coverage too was reduced by 50 per cent. Consequently, the contribution of the primary sector, which includes agriculture, is expected to drop from Rs. 15,287.25 crores last fiscal to Rs. 14,004.01 crores.

During the last financial year, the GSDP, a crucial economic indicator, was pegged at Rs. 91,841.17 crores - 3.06 per cent increase over the previous year— with the secondary manufacturing industry showing a 3.94 per cent growth and the service sector 5.01 per cent, compensating for the minus 3.86 per cent growth in the primary agriculture sector.

The growth in the manufacturing sector too appears declining, with the official projections putting it at just 0.86 per cent as against 3.94 per cent last fiscal. Unlike Andhra Pradesh and a few other States, Tamil Nadu does not come up with a half-yearly GSDP picture. It makes annual projections depending on production and revenue generation in various sectors.

Barring the boom years of 1997 and 1998, when agriculture and allied sectors posted an over 8 per cent growth, the primary sector in the State has gone through a lean patch, with Karnataka holding up the Cauvery waters and the monsoon playing truant in the last eight years.

Consequently, the contribution by agriculture to the economy has also come down to a little over 16 per cent, while the service sector, which covers trade, hotels and transport, accounts for 49.31 per cent and the secondary manufacturing sector, 34.04 per cent.

The Government's economic managers are now worried about the bleak beginning in the first year of the 10th Plan period, during which Tamil Nadu hopes to achieve 8 per cent growth in GSDP by 2007.

An unprecedented fiscal crisis, uncertain recovery in the industrial sector and the dismal scene on the agriculture front are all cause for concern.

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