PANIC MOVEMENT OF MIGRANTS MUST NOT BE ENCOURAGED: NITI’S CHAND

The government is optimistic that agriculture will bail out the Indian economy in 2020-21 from the Covid-19 crisis. NITI Aayog member RAMESH CHAND explains to Sanjeeb Mukherjee the reasons behind the same. Edited excerpts:

You recently said agriculture would be a sort of shining armour for the Indian economy in 2020-21 and might clock growth rate of 3 per cent and even above. What makes you so confident and what are the factors on which you have based your assumptions?

At this early stage, agriculture outlook for the year 2020-21 can be based on these factors — forecast about monsoon, water level in reservoirs, terms of trade for agriculture, and estimate of area and input for the current quarter (AprilJune).

According to the India Meteorological Department, India is expected to receive normal monsoon in 2020. The empirical data shows that in twothird of cases when monsoon was normal, growth rate of agriculture remained more than 3 per cent that year. The undercurrent indicates that real prices of food commodities this year are set to increase significantly. The area under summer crops, which are counted in output of first quarter, is 38 per cent higher than last year ’s. Despite the lockdown, fertiliser offtake in April is 49 per cent higher than the same month last year. Based on these factors, I expect agriculture sector to follow the longterm growth of the sector, which is around 3 per cent.

The livestock sector, which contributes a significant chunk of the growth in agriculture and allied activities, has been hit hard by the lockdown. How do you think this sector will perform in the days to come?

Crop sector continues to dominate agriculture and allied sectors. Its contribution to gross value added (GVA) is little more than double the contribution of livestock, which includes dairy, poultry, meat, wool, and piggery etc. Poultry demand and prices picked up sharply in April, and the activity is expected to show recovery this year. Milk prices suffered the effect for a few days in the beginning of the lockdown but then turned normal in April.

Aren’t you being too optimistic with the predictions at a time when farmers are throwing away their produce due to lack of demand and prices have crashed?

Some perishable fruits could not be sold by farmers due to problems in labour, transportation, or marketing. Such cases are isolated and covered tiny fraction of the total output. At aggregate level such losses will be covered by higher output. About 80 per cent GVA of agriculture is realised in the main rabi and kharif seasons (June to March). If the situation turns normal in the next quarter, agriculture can be safely expected to move on a long-term growth trend.

How will farmers’ income perform in 2020-21, assuming that growth is on par with your prediction of 3 per cent?

Farmers income matters in current prices. If GVA increases at 3 per cent at constant prices, farmers’ income can be expected to rise at a much higher rate depending upon increase in agricultural price relative to non-agricultural prices. While there is fear of deflation in overall prices, the trend in agricultural prices is expected to be opposite.

What is your outlook for kharif sowing at a time when farmers are complaining of poor seed availability and difficulty in accessing other inputs?

There is still sufficient time to arrange seed, fertiliser, and other inputs for kharif season. Past experience shows that major determinant of kharif sowing is behaviour of monsoon such as date of arrival and distribution etc.

With labourers migrating to rural India due to Covid-19, what should be the strategy to provide them employment in the coming days?

The states should make highest use of MNREGA resources to give employment to the needy workers. I feel we should not encourage panic movement of migrant workers to their native places, except in genuine cases. Economic activity must pick up and it will pick up soon throughout the country. It will incur loss of opportunity to rush to native places en masse.

What strategies should states adopt to ensure that kharif sowing and harvest go unhindered?

Paddy is the most important crop of kharif season. Its transplanting in many states depends upon availability of migrant labour. Thus, interstate mobility of labour will affect crop pattern.

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