The Hindu : Business : Centre to ensure 4 p.c. farm growth

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Friday, Jan 18, 2008
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Centre to ensure 4 p.c. farm growth

Special Correspondent

NEW DELHI: Finance Minister P. Chidambaram on Thursday announced that the Government would take all steps that are required to ensure a farm sector growth of four per cent, along with a hike in public expenditure for development of rural areas.

Addressing delegates at a Confederation of Indian Industry (CII) summit at Gurgaon (Haryana) near here, Mr. Chidambaram said: “Our goal is to make agriculture grow at four per cent. The area and productivity of major crops like wheat and rice have stagnated over the last 10 years.

“The need is to increase area under cultivation and productivity of these crops.”

This, he said, was essential as with sectors such as industry and services growing at more than 10 per cent, the level of inequality in the country was bound to increase owing to the fact that the same tempo of growth could not be expected from agriculture.

Therefore, “the Government will adopt a two-fold approach,” Mr. Chidambaram said, to tackle the problem of growing inequality.

Apart from ensuring the maximum possible growth in the farm sector, the Government would consciously raise public expenditure in health, education, drinking water and other social sectors for rural area development.

Another conscious exercise would be to engage a large chunk of the rural population in sectors like industry and services as the “country does not need more than 10-20 per cent population to grow food for the whole population [of the country],” he said.

U.S. recession

Turning to the external sector, Mr. Chidambaram pointed out that while a sharp cut in interest rates by the U.S. to avert recession would hit India, the Government would take appropriate steps to soften the negative impact.

However, without detailing on how the economy would be largely insulated from the effects of a possible U.S. recession, Mr. Chidambaram said: “India is not so dependent upon the U.S. as some countries are… Our exports to the U.S. are significant, but not so significant that we will be gravely affected.”

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