Economic Survey predicts 18% fall in foodgrains production

Published in The Hitavada on March 20, 2013

Economic Survey predicts 18% decline in foodgrains production due to drought

* Decline in foodgrains production is likely to push prices of essential commodities further

* Eknath Khadse expresses concern over negative growth rate of agriculture

By Kartik Lokhande

MUMBAI, March 19: IN the shadow of drought, Maharashtra is likely to see decline of 18 per cent in foodgrains production, predicts Economic Survey of Maharashtra for the year 2012-13 tabled in State Legislature on Tuesday. Though it brings out rise in Gross State Domestic Product (GSDP) by Rs 52,214 crore, it predicts negative growth for agriculture sector.

The survey, tabled in Legislative Assembly by Deputy Chief Minister and Finance Minister Ajit Pawar, expects GSDP to grow at 7.1 per cent during 2012-13 but predicts agriculture sector to grow at -1.4 per cent. The negative growth rate of agriculture sector will ‘restrain the growth of agriculture and allied sector at -2.1 per cent’, states the report. While this is the case with agriculture sector, industry sector is likely to grow at 7 per cent and services sector at 8.5 per cent. As far as GSDP is concerned, the Survey shows increase by Rs 52,214 crore, from Rs 7,35,212 crore in 2010-11 to Rs 7,87,426 crore in 2011-12.

However, due to low intensity and deficit monsoon in some parts of Western Maharashtra, Aurangabad, and Nashik Division and subsequent drought situation in State, the Economic Survey has predicted ‘drastic reduction’ of 18 per cent in foodgrains production. The production of sugarcane also is expected to decrease by 33 per cent. This is the result of delayed sowing of Kharif crops, low moisture and erratic rainfall reducing area of Rabi crops. It requires no expert economist to predict that decline in foodgrains production will increase prices of essential commodities in near future.

Though the Government claimed decline in year-on-year inflation rate based on all-India wholesale price index (WPI) from 7.5 per cent in April 2012 to 6.6 per cent in January 2013, the food group inflation increased in January 2013. The year-on-year inflation rate for ‘fuel, power and light’ group was 21.9 per cent in April 2012 and it increased to 24.2 per cent in December 2012 for urban areas. This indicates rising prices of food items and fuel.

The survey predicts revenue receipts to be Rs 1,36,712 crore during 2012-13, with revenue surplus of Rs 153 crore. However, it also states that the debt stock of the State is expected to reach Rs 2,53,085 crore in the financial year. The accumulation of unpaid loan and other liabilities on the Government forms the debt stock. The survey points out that debt stock of the State is ‘increasing annually with average rate of 11.2 per cent.’ Revenue receipts are expected to increase, but the amount of tax raised but not realised by the end of 2010-11 is pegged at a whopping Rs 27,778 crore. This does not indicate a very happy scenario as far as financial reforms and management is concerned. Still, in the Survey, the Government has tried to project positive picture by making a statement, “The percentage of fiscal deficit to GSDP is 1.7 per cent and debt stock to GSDP is 18.4 per cent during 2012-13, well within consolidated fiscal reform path.”

Talking to reporters, Leader of Opposition in Legislative Assembly and former Finance Minister Eknath Khadse said that negative growth rate projection for agriculture and allied sectors was a cause of concern. “It will have impact on overall economic scenario of the State,” he said.

 HIGHLIGHTS

·         State’s debt stock to increase to Rs 2,53,085 crore

·         Agriculture and allied sector to post negative growth rate of -2.1 per cent

·         Net State Domestic Product is Rsw 10,82.751 crore

·         Per capita state income is Rs 95,339 during 2011-12

·         Foodgrains production to decline by 18 per cent

·         Revenue receipts to be Rs 1,36,712 crore during 2012-13

·         Projected fiscal deficit is Rs 23,066 crore

·         State attracts FDI of Rs 97,799 crore between August 1991 and March 2012

·         Installed power generation capacity of State was 22,798 MW in December 2012

·         Aggregate technical and commercial losses of MSEDCL come down only by 0.1 per cent to 18.4 per cent

·         State fares well on infant mortality rate, reduction in poverty, but records more fatalities in road mishaps and child rapes