Rajeev Malik’s ‘Wake up to shifting cross-currents’, September 9, is an exercise in self-delusion. It is no one’s case that the impact of a drought on GDP will be the same as it was, say, 50 or even 10 years ago. The fact that the share of agriculture in GDP has declined and that, within agricultural income, the share of pure farming of crops has fallen is well known.
The real issue of the drought is two-fold — what does it do to occupations like dairying and two, what does it do to inflation. We are already reeling under the second impact. Additionally, the RBI Governor is already talking of hiking interest rates to tackle inflation even though most know food-inflation cannot be tackled through rate hikes. The impact of this could be to kill off the small growth stimulus we are currently witnessing. This is the real drought impact.
N Kumar, on email
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