The growth target of gross domestic product of 6.6 per cent in the current financial year has come under a cloud following reports that agricultural output in the year may be much lower than anticipated.
This is because agriculture was expected to make up for the loss of steam in the industrial sector and mitigate any shortfall in the overall growth targets at a projected rate of growth of 4 per cent. But with the delayed onset of winter rains, some doubts have been expressed on the rabi output in the current year.
While the government itself has been silent about any likely downward revisions, the National Council for Applied Economic Research (NCAER) in its revised estimates for the year has fixed GDP growth at 5.9 per cent, which is lower than the projection of 6.3 per cent made in September.
They have, however, retained agricultural growth rate at 4.1 per cent but have scaled down industrial growth targets to 9.3 per cent. In the initial projections in September, the Council had projected industry to grow at 10.2 per cent. While public investment is expected to grow at the projected level of 15 per cent, private investment is expected to decline marginally to 18.3 per cent.
According to official sources, with about 103 million tonnes of grains having already been bagged in the last kharif, the total grain production in 1996-97 is anticipated to be close to 190 million tonnes. The outcome depend on weather between now and the harvesting time, around March-April. In the current year, the expectations are that industrial growth would average only single-digits as the economy is headed for a slowdown. In this background, any setback in the crop output would have a bearing on the agricultural sector and, thereby, the economy's growth rate.
