Rural economy shows better prospects of consumption in 2021

As per the provisional estimates of Gross Domestic Product (GDP) for the year 2020-21 released by the National Statistical Office, the Gross Value Added (GVA) of agriculture has shown a growth of 3.6 per cent, signalling better prospects of consumption in rural India, Pankaj Chaudhary, Union Minister of State for Finance said in a written reply in the Lok Sabha recently.

The minister said that total foodgrain production was estimated to rise 2.7 per cent to a new record of 305.44 million tonnes in the current crop year 2020-21, on record output of rice, wheat, maize and gram. Further, domestic tractor sales, an indicator of rural demand, recorded a growth of 27 per cent in FY 2020-21 over previous year. The forecast of a normal south-west monsoon in 2021-22 and recent trends in Kharif sowing are further expected to boost rural incomes.

Giving more details, the minister said that in line with the announcement made in Union Budget, 2018-19 to keep Minimum Support Prices (MSPs) at levels of one and half times of the cost of production to ensure remunerative prices to the farmers for their produce, the Government has increased the MSP for Rabi and Kharif crops for the marketing season 2021-22. Higher MSPs have been supported by record levels of procurement by the Government at 869 lakh metric tonnes (LMT) of paddy benefitting 128.22 lakh farmers with an MSP value of Rs. 164,066 crore during Kharif Marketing Season 2020-21 and 433.32 LMT of wheat benefitting 49.16 lakh farmers with MSP value of Rs.85,581.02 crore during Rabi Marketing Season 2021-22.

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