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Rural demand expected to increase by Rs 10,700 thanks to bumper harvests: report

By on September 24, 2021 0

Rural demand expected to increase by Rs 10,700 thanks to bumper harvests: report

1970-01-01T05: 30: 00 + 0530

Mumbai, Sep 24 (PTI) Rural demand is expected to reach around Rs 11,000 crore thanks to the record kharif harvest as well as the marginal hike in the minimum support price, according to a report by Care Ratings.

The Agriculture Ministry predicts a good harvest in early estimates for the Kharif season at over 150 million tonnes. Along with this, the government had also increased the Minimum Support Price (MSP) of all kharif crops from 1% to 5%, with tur, urad, peanut, jowar and bajra getting the upper part of these. new prices. Normal monsoons will also help farmers.

Preliminary estimates show that if overall crop production would be higher this year, there would be deficits in some of them such as oilseeds, cotton and some of the coarse grains whose area cultivated has decreased.

The Agriculture Ministry on Tuesday released the first anticipated production estimates for major Kharif crops for 2021-22, with total food grain production set to hit a new high of 150.50 million tonnes (mt).

However, oilseed production is estimated at 2.33 million tonnes, below its target of 26 mt and last year’s 24.03 mt.

At 150.50 mt, this is 12.71 mt more than the average production of food grains for the previous five years. However, the total production of food grains stood at 149.56 tonnes in the last Kharif season and this year the government target was 151.43 million tonnes.

In a note, CARE Ratings chief economist Madan Sabnavis said on Friday that farmers’ net disposable income this season is expected to be 10,700 rupee crore higher, up 5.3% due to the times of higher production and higher prices.

It could earn Rs 2,010,099 crore versus Rs 1,99,357 crore in 2020, while net gross income will be Rs 5.65 lakh crore, compared to Rs 5.36 lakh crore in 2020, the income ratio net / total income being 37%, Sabnavis added.

Offering a probable distribution of income from major Kharif crops, he said the net income for grains would drop from Rs 93,068 crore to Rs 97,463 crore, those of pulses to Rs 20,757 crore from Rs 17,999 crore, the seeds oilseeds at Rs 33,928 crore from Rs 33,245 crore, and cash crops from Rs 55,045 crore to Rs 57,951 crore.

It totals from Rs 1,99,357 crore in 2020 to Rs 2,010,099 crore, indicating a net increase of Rs 10,700 crore, after adjusting for inflation.

To assess the structure of rural household expenditure, weights of retail price inflation or the CPI could be used as a proxy. These weights are similar to the NSS survey conducted for 2011-12, which is also the base year used by the CSO to calculate the CPI, in which rural households have so far averaged 7, 5 percent.

As a result, food and beverages have the maximum weight at 54.2 percent, grains (12.4 percent), milk (7.7 percent), clothing and shoes (7.4 percent) , fuel and lighting (7.9 percent), miscellaneous items of 27.3 percent. percent and health care at 6.8 percent, among others.

Therefore, the increase in farmers’ net disposable income from kharif production of around 10,700 crore rupees can be affected by savings (may represent 20% of additional income) and inflation from 5 to 10%. for non-food products, note the note. noted.

He added that the additional income of Rs 10,700 crore can be split between savings and consumption, with healthcare being an area of ​​focus. PTI BEN HRS


Disclaimer: – This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI