GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development
GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Rural Imperative in the wake of COVID crisis
Context: The main kharif planting season will begin only from mid-June with the arrival of the monsoon rains.
Agricultural Sector in 2020-21
The year 2020-21 was exceptional, where the farm sector expanded by 3%, even as the Indian economy as a whole contracted by 6.5&.
Agricultural exports also grew 17.5%, despite the value of the country’s overall merchandise shipments falling by 7.2%.
Industries like tractor, FMCG and cement companies rode high on rural demand in 2020-21.
The end result was that rural India provided a cushion for the economy, which suffered its worst recession since Independence and the first after 1979-80.
Reasons for above scenario
Low impact of Pandemic: Covid-19 cases being very low in rural areas last year and the government exempting agricultural activities from lockdown restrictions
Favourable Monsoon: Another reason was excellent rains and favourable winter temperatures that helped farmers harvest a bumper crop.
Favourable Prices: There was also a spike in global agri-commodity prices from around October, the benefits of which were reaped by soyabean, mustard, groundnut, cotton, arhar, urad and chana growers.
Right interventions by government: Firstly, government undertook massive procurement of wheat, paddy, mustard and rabi pulses that were marketed post the lockdown.The second was the record 389.37 crore person-days of employment that got generated under MGNREGA during 2020-21. Along with these two, there was Rs 6,000-per-farmer cash transfer under PM-Kisan that ensured sizeable liquidity infusion into the rural economy.
What will be the scenario this year?
The Indian Meteorological Department has forecast a normal southwest monsoon, while FAO’s world food price index hit an 83-month-high in April. On both these fronts — rainfall and prices — the outlook for agriculture, thus, remains favourable.
The availability of cushion, provided by agricultural sector last year, is in doubt today, with the second wave of the pandemic not sparing rural areas
This year, there is not much requirement for MSP procurement, barring in wheat.
The scope of MGNREGA works is also limited when Covid has made deep inroads into rural areas.
Conclusion
If the current wave subsides by planting season of Kharif, things shouldn’t turn out too bad.
The focus of government should be more on cash transfers. There’s no better time to put to use the JAM (Jan Dhan-Aadhaar-Mobile) infrastructure than now.
