Economic Survey tabled on Tuesday by Finance Minister Arun Jaitley warned of a repeat of pulses-like crisis in other agri-commodities and asked the Government to be “vigilant” to prevent spike in prices of items like sugar, milk, potatoes and onion.
The Economic Survey 2016-17 pegged agriculture and allied sector growth at 4.1 per cent this fiscal on account of good Monsoon from 1.2 per cent last year but said there is less chance for the sector to give an extra boost to GDP growth next year.
It also pointed out the challenges facing the sector like regulation on farm trade, issues related to IPR in seeds, frequent recourse to stock limits, among others creating “uncertainty” for farmers.
“Demonetisation could also affect supplies of certain agricultural products, especially milk (where procurement has been low), sugar (where cane availability and drought in the Southern states will restrict production), and potatoes and onions (where sowings have been low),” according to the pre-Budget document tabled in Parliament.
“Vigilance is essential to prevent other agricultural products becoming in 2017-18 what pulses was in 2015-16 in terms of supply deficiencies and consequential higher inflation,” it said.
Stating that it is too early to predict prospects for the Monsoon as well as farm production in 2017, the Survey however said, “But the higher is agricultural growth this year, the less likely that there would be an extra boost to GDP growth next year.”