The ongoing price recovery in major crops is in danger of being stymied by knee-jerk government response.
A lot of analyst commentary on the latest quarterly GDP numbers for India has focused on the low growth in “nominal” terms: Gross value added (GVA) at current prices grew by just 6.3% year-on-year in July-September and 7.1% for April-September. If this first-half trend holds for the rest of 2019-20, it would be the lowest growth since the 6.2% recorded way back in 1975-76.
GVA is basically the value of output of goods and services, less the cost of all inputs and raw material used in their production. Growth in “real” GVA, which is at constant prices, is a measure of how much net output has increased. Nominal GVA growth, on the other hand, shows how much current net income has gone up. For producers, “income” is what matters more than “output”.
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