Kharif crop production to fall by 15-20%: FM

The output from the kharif crop may drop by 15% to 20% due to scanty rains during the southwest monsoon season, Finance Minister Pranab Mukherjee said. India’s 278 districts, 44% of the nation’s total, have declared drought, or are in a drought-like situation because of below average rainfall this year, he said at an event organised by industry chamber FICCI in New Delhi.

"For impact of production on the Kharif crop, exact quantum will be known only when the harvesting starts. But from the picture of sowing, one can easily estimate that there is likelihood of a shortfall to the extent of 15-20%," he told a gathering of industry captains. He added that drought is a reality and rainfall deficiency for the season is to the extent of 26%. "We feel there is no need for a panic response," Mukherjee said.

The Finance Minister said that given the situation, the drought would have only marginal effect on central procurement, as the Government was able to contain the effects of drought in Punjab and Haryana. "I have been told that the yield in these states will not be affected due to drought and it is important from the central procurement point of view, as 65% of wheat and 30% of rice procurement is done from these states," Mukherjee said.

He said that the Government would have 1.77 million tons of wheat available by April 1, 2010, and 1.37 million tons of rice by October 1, 2009. The Finance Minister assured India Inc. that the Government was sensitive to the cause of industry and would take steps to contain inflationary pressures and monitor borrowings so that it does not crowd out private investments.