Growth push

New Delhi, July 19: Industry has received a shot-in-the-arm from an all-time high agricultural production in the last fiscal.

Production of all major agriculture items — foodgrain, pulses and oilseeds — touched new peaks, meaning farmers should have sufficient money from the sale of their produce to spend on consumer durables and yank industry out of the gloom induced by a growth rate of just 5.6 per cent in May against 8.5 per cent a year ago.

N.R. Bhanumurthy of the National Institute of Public Finance and Policy said the growth in agricultural production would result in increased cash flow in rural India which could spur demand for consumer durables and help the overall economy.

Businesses have also been stymied by a prolonged series of RBI rate hikes — 10 hikes since March last year — that have had an adverse effect on investment sentiment.

Foodgrain production stood at 241.56 million tonnes (mt) for the year, much higher than 218.11mt produced in the previous fiscal. The previous record was 234.47 million tonnes in 2008-09.

“A record foodgrain production has been achieved due to sustained efforts to increase credit, minimum support price, better supply of seeds and fertiliser and higher investment,” agriculture secretary P.K. Basu told reporters.

According to the fourth advance estimates prepared by the agriculture ministry, wheat production reached a peak of 85.93 million tonnes.

As with wheat, production of pulses was at an all-time high of 18.09mt, an increase of 3.43mt from the previous year.