Finance Minister Pranab Mukherjee today said there was no need to press the panic button, though there would be 20 per cent decline in sowing of summer crops due to scarce rainfall. A total of 161 districts have been declared drought-prone.
He stuck to the Reserve Bank of India's growth projection of 6 per cent and above for the current financial year. “This country has the experience of handling the situation and I will advise not to press the panic button,” Mukherjee said today at the annual conference of chief commissioners and directors-general of income tax.
India is only one of the 20 countries in Asia whose agriculture and economy critically depend on the rains of the summer monsoon. The monsoon rains are essential for agriculture, which boosts rural income and drives economic growth.
In a separate meeting with representatives of the Federation of Indian Chambers of Commerce and Industry, Prime Minister Manmohan Singh assured that the government would do “everything possible” to put the lid on food inflation. “He (prime minister) was quite confident that given the buffer stock, they (government) would be able to handle the food inflation," Ficci secretary-general Amit Mitra told reporters after the meeting. Central agencies like Food Corporation of India have buffer stocks of over 50 million tonnes of rice and wheat.
The metereological department said the average monsoon rainfall has been deficient by 25 percent in the country for the period June 1 to August 5. However, the Finance Minister said it would not affect the overall economic scenario. He also expressed confidence that the direct tax collection target of Rs 3.7 lakh crore will be surpassed for the current financial year.
He said the country managed the century's worst drought in 1987. It had affected over 6,500 villages and 1.4 million hectares of land.
Mukherjee said the government was ready to manage a drought, and a contingency plan was also in place. "There is always a contingency plan," he said, indicating measures such as allowing import of foodgrain, continuing with the ban on exports and asking state-run agencies to buy more stocks from the open market.
He also said Punjab and Haryana made up for low rain by using ground water, even as Bihar and Uttar Pradesh were facing shortage of water.
