Higher farm growth to take GDP past 9.5%

The government is likely to revise upwards the agricultural production growth estimate for 2006-07 by nearly one percentage point to 3.7 per cent.

This would lead to a further upward revision in the gross domestic product (GDP) estimate for the year to more than 9.5 per cent. The quick estimates released on May 31 had pegged the GDP growth for 2006-07 at 9.4 per cent.

"Agricultural production will be revised by about a percentage point due to increased production when the revised estimates of GDP are released towards the end of August," a government official told Business Standard.

The quick estimates of GDP, announced on May 31 by the Central Statistical Organisation (CSO), had pegged agriculture growth at 2.7 per cent in 2006-07.

Finance Minister P Chidambaram had recently said that if the country could get its act together and push agriculture growth to 4.5 per cent, it would be able to achieve a double-digit GDP growth rate of 10 per cent in 2008-09.

On July 19, the agriculture ministry released the revised farm production data for 2006-07, hiking the earlier estimate of foodgrain production from 208.6 million tonnes to 216.13 million tonnes. Foodgrain output growth is now 3.6 per cent against 1.5 per cent estimated earlier.

The department also announced substantial growth in the production of several other crops, including soyabean, sugarcane, cotton and maize, indicating higher overall growth in farm output than reckoned in April this year. The output of all these crops is now projected at record levels.

The revised numbers put the rice output in 2006-07 at 92.76 million tonnes, about 1.1 per cent higher than 91.79 million tonnes. The estimates released in April had indicated a decline of 0.8 per cent in the rice output.