India set to reap monsoon bonanza with bumper crop
Sowing of most summer crops has risen higher than normal on the back of good rains, latest government data show, pointing to a plentiful harvest after a devastating two-year drought.
A good harvest, key to prosperity for half of all Indians, could lift rural incomes for the first time in three years. An improvement in rural incomes is likely to provide a tailwind to the Modi government’s growth agenda by boosting spending on consumer goods.
The area under pulses is nearly 40% higher than the normal, yet another sign that India’s mostly poor farmers respond promptly to policy measures. Pulses, a scarce item, have roiled household budgets over two years because India has had to rely on costly imports.
The increase is mainly because of higher minimum support prices (MSPs) and the government’s decision to build a buffer stock. MSPs, which act as a floor price for farmers, help avoid less-profitable sales when the government builds a buffer by buying the produce.