Farm sector growth set to plunge to 2.5% | business | Hindustan Times
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Farm sector growth set to plunge to 2.5%

India’s farm sector is set to expand by a moderate 2.5% during 2011-12 and all hopes to sustain growth are on this year’s monsoon rains. Last year the farm sector grew by 7% but that was on the previous drought year’s output. A strong farm sector output is critical to bringing down food inflation.

business Updated: Feb 07, 2012 22:21 IST
HT Correspondent

India’s farm sector is set to expand by a moderate 2.5% during 2011-12 and all hopes to sustain growth are on this year’s monsoon rains. Last year the farm sector grew by 7% but that was on the previous drought year’s output. A strong farm sector output is critical to bringing down food inflation.

While food inflation has slumped to negative levels in recent weeks, costlier fruits and protein-based items such as milk, egg, meat and fish could jack up prices to higher levels in the coming weeks.

Adequate monsoon rains are crucial for the summer kharif crop that accounts for more than half of annual food output.

Economists expect farm sector output to be revised upwards when final estimates are released in May.

“The details of the advance estimate indicate that agriculture output growth will likely be revised up following the final crop estimate,” said Rajeev Malik, senior economist at CLSA.

Finance minister Pranab Mukherjee said that there have been some encouraging signs in the recent weeks including the possibility of a bumper rabi crop.