The Hindu Business Line : Agri sector will fare better: Plan panel member

Chennai, July 25 The agricultural sector will fare better in the current year, going by the pattern of rainfall experienced in the last couple of months, the Planning Commission member, Dr Saumitra Chaudhuri, said on Saturday.

The delayed and deficient monsoon in the current year has been a concern, but Dr Chaudhuri observed that although the country saw above average rainfall last year, agricultural production did not go up much. This was because the rains fell on those areas that were anyway well irrigated — mainly, the Gangetic plain. The rain-dependent areas of central India did not get much rains.

Better situation

However, in the current year, the rain-dependent areas have been getting good rains. “It is a much better situation this year,” Dr Chaudhuri said, speaking to a small gathering of members of the Confederation of Indian Industry.

He said that corporate investments are beginning to happen, and observed that loan issuance, though low at the moment, would pick up, as there is no liquidity problem. Companies are also able to raise equity in the capital markets.

Against this backdrop, Dr Chaudhuri discussed a few factors that could potentially derail the growth prospects. Monsoon was one of them, and he said that the pattern of rainfall, as seen thus far, is actually better.

The fiscal deficit, he said, was easily manageable. He said that of the Rs 3.97 lakh crore deficit, about Rs 32,000 crore was only ‘book entry’ (notional). Another Rs 88,000 crore could be met using the funds got by selling MSS bonds. The remaining Rs 1.92-odd lakh crore is not too large and could be managed.

Mr Manickam Ramaswami, past President, CII-Tamil Nadu, said the CII’s stand was for monetising the deficit. Dr Chaudhuri said that monetising (or printing notes) would only debase the currency, which in turn would hurt corporate balance sheets too. “I find it absurd that CII is suggesting this,” he said.

The third block

The third potential stumbling block, he said, could be the procedural difficulties in implementing infrastructure projects. But here again, he said, things are getting better.

Dr Chaudhuri pointed out that the Ministry of Shipping and Surface Transport had looked into the issue of land acquisition problems in building roads, and found that only about 600 hectares in the entire country faced this problem.

He said that fall in exports was a real concern. What do we do about it, he asked, noting that nothing much could be done except to stimulate demand in domestic market as much as possible.

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