The Reserve Bank of India (RBI) today said it expected the farm sector growth to stay "broadly on track", though it underlined some concerns about the weakening trends in the monsoon pattern.
"Despite the scaling down of the monsoon forecast to slightly below normal in 2011-12, agriculture growth is expected to stay broadly on track," the RBI said in its Macroeconomic and Monetary Developments report released on the eve of the first quarter credit policy announcement tomorrow.
The central bank, however, underlined that a "near- normal" monsoon performance will be important for higher growth. Though growth will be good in absolute terms, in percentage terms it may be lower this fiscal on account of the high base effect from the past year's record production.
Noting that the Met Department had cut its forecast of a normal Southwest monsoon for 2011 from 98% of the long period average to 95%, the RBI said though the monsoon has started well, it is likely to weaken going ahead.
In the report, the apex bank has also drawn attention towards the urgent need to augment the food storage capacity, saying any delay will lead to continued and increasing wastage and losses of the food items.
The country had witnessed a 5.4% growth in the agriculture sector in 2010-11 after a drought in the previous year, when the farm growth was a paltry 0.4%.
The rains play an important part in supporting nearly two-thirds of the population of an irrigation-deficient country subsisting on agriculture.
