Indian Economy shrinks by 23.9% in Q1 of FY21, farm sector sees outburst in Covid19

The farming sector which contributes almost around 17 percent to India’s GDP has been a backbone and helped arresting a much deeper fall in economic growth.

Central Statistics Office released a data report on the evening of August 31, the agriculture sector fortunate enough to get good rains help grew 3.4 percent in the first quarter Q1 of 2020-21. This growth was against 3% during the same period last year.

The first quarter Q1 of economy where Agricultural GDP includes production from the rabi season ended with harvesting in April-June season. The Agriculture Ministry has gained an outburst output of wheat, chana and other rabi food grains which grossed 5.6 percent higher than last year.

During the lockdown period, The Food Corporation of India launched a massive operation to complete and boost up  procurement and make payments to farmers as well.This step led to the massive production in the primary sector of our economy.

For farmers having agricultural growth in nominal terms especially after adding inflation assumes importance.

According to Sreejith Balasubramanian, Economist — Fund Management, IDFC AMC, “the government’s spending on the rural economy, sale of tractors and support through MGNREGA have all been positive but it is probably still a case of over-optimism.”

A report by India Ratings said, “the government needs to have a well-crafted strategy in place, both to continuously monitor the progress of the kharif crop and prevent its distress sale, with harvesting expecting to begin in a month’s time.”

The government is optimistic about the 2020-21crop year will report on all-time record output of food grains and cross the target of 298 million tonnes.

While the industrial and services sectors are still struggling its vulnerability from disruptions caused by the Coronavirus. The Agriculture sector can become an outbursting Asteroid for recovery.

Besides agricultural output, it is believed that many factory workers who returned to their native places in the aftermath of the nationwide lockdown will add to the rural demand.

Alongwith it there is also exists hope for a turnaround of the Economy, according to the survey where 57.2% expected that radical changes could bring major changes in Economy.

Also Read : Covid-19 pain: India’s GDP contracts by record 23.9% in Q1