According to Advance Estimates, the government expects that the 8.6 per cent growth of the economy during the current fiscal will be powered by agriculture growing at 5.4 per cent, a big jump over 0.4 per cent last year.
"All along I was maintaining, it should be around 8.5 per cent plus. 8.6 per cent is accepted," Finance Minister Pranab Mukherjee said adding, "Now the other issue is inflation, trade balance… these are to be addressed".
In October, the government raised the minimum support prices for rabi crops. The price of pulses was raised by up to Rs. 380 a quintal, while that of gram or chana was raised by Rs. 340 a quintal to Rs. 2100 per quintal. MSP for wheat was raised by Rs. 20 a quintal to Rs. 1120.
The sharp increase in MSP for pulses indicates that the government wants to cut down on the dependence on exports. That has helped drive up the acreage which is showing up in the higher output.
Farmers are also focusing on cash crops because of the failure of cotton crop in China and Pakistan is driving prices are demand in India. Sugar prices are surging higher because demand continues to be strong around the world. Indian farmers may just begin to be a part of the agri commodities boom.
With over dependence on monsoon, the country’s agricultural growth continues to fluctuate year- on-year depending on the weather gods.
Mukherjee said the economic growth estimated was satisfactory in the wake of the rising inflation and trade imbalances.