Thursday, June 30, 2005

India focuses on farm output growth

by Brian Turner

Some experts in India are calling for more investment in irrigation and moisture retention technologies to help raise farming output by making up for differences in rainfall between weak and strong monsoon years.

This would go a long way to increasing the difference between growth in output in the farming sector and other sectors, such as the manufacturing sector.

While overall growth in India’s economy was 7 percent in the fourth quarter of fiscal year 2004/05, bringing the Asian nation’s economic growth for the year to 6.9 percent, the figure forecast by the Indian government, output growth in the manufacturing sector surpassed by far farming output growth.

In the manufacturing sector, output growth was 8.6 percent for the January-March quarter, and growth for the year was 9.2 percent. In the farming sector, however, output growth was 1.8 for the last quarter and only 1.1 percent for the year. This was far below the forecast of 4 percent growth in farm output.

The farming sector, which supports 600 million Indians and forms one-fifth of the nation’s GDP, has traditionally influenced the whole Indian economy through its demand for manufactured goods.

The latest economic data, however, shows that the link between farming incomes and industrial activity is weakening because of factors that include more availability of credit to rural populations, a growing export market, and the rise of an affluent middle class.

 

 

 

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