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RBI pegs 2001-02 GDP at 5.4%

CREDIT POLICY

Positive turnaround in agriculture and allied activities has contributed largely to the recovery of real gross domestic production at 5.4 per cent in the 2001-02 fiscal compared to 4 per cent in the previous year, according to the Reserve Bank of India report on Microeconomic and Monetary Developments for the year 2001-02.

Indicating a sustainable GDP growth rate at over 5 per cent for the current financial year, RBI said in its report that the sharp increase in real GDP originating from agriculture and allied activities by 5.7 per cent was mainly on account of higher production of foodgrains, oilseeds and cotton during the year.

In the previous financial year, there was a negative 0.2 per cent growth rate in agriculture sector.

However, the growth in industrial sector continued to be subdued with the slowdown permeating in all sub-sectors particularly in manufacturing, mining and quarrying, electricity, gas and water supply.

The industrial sector in terms of gross value addition, is estimated to have grown at a lower rate of 3.3 per cent in 2001-02 as against 6.2 per cent in 2000-01.

Services sector, on the other hand, recorded a higher growth rate at 6.2 per cent against five per cent though the pace of growth remained slow in relation to a growth of 9.4 per cent in 1999-2000.

Its contribution to the real GDP growth is pegged at 3.3 per cent during the year.

Citing an advance estimate made by the Union agriculture ministry, RBI said that foodgrains production was expected to peak at 211.2 million tonnes in 2001-02 from 195.9 million tones in the preceding year.

The growth was mainly from higher production in rice, wheat, pulses and coarse cereals.

Non-foodgrains such as oilseeds, cotton and jute also recorded higher production during the year even though sugarcane production declined.

Total rice production peaked at 90.8 million tonnes during the year consequent upon the improvement in performance in both kharif and rabi seasons, although it is short of the target of 92 million tonnes.

Wheat production is estimated to have gone up by 6.9 per cent to 73.5 million tonnes in 2001-02 against the target of 78 milion tonnes.

During the year, output of pulses recorded a significant growth of 29.2 per cent to reach 13.8 million tonnes while coarse cereals showed a growth of 4.7 per cent at 33.1 million tonnes.

Meanwhile, the higher production in foodgrains put severe constrains on government finances as the Centre continued to procure foodgrains at higher prices and incurred huge expenditure towards stockpiling it.

This entailed substantial increase both in food subsidy and food credit which rose from Rs 60.66 billion in 1996-97 to Rs 120.10 billion in 2000-01 while the outstanding food credit extended by commercial banks rose from Rs 75.97 billion in 1996-97 to Rs 399.91 billion as at end-march last year and further to Rs 539.78 billion at the end of March, 2002.

Upto February this year, foodgrain procurement increased by 13.9 per cent to 41.3 million tonnes while the offtake rose by 71.9 per cent to 26.4 million tonnes.

Inspite of all these, stocks of both rice and wheat recorded an increase of 16.6 per cent at 54.5 million tonnes during the year.

UNI

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