Mumbai: India’s economy is expected to grow between 6.25 and 7.0% in 2009-10 but a monsoon deficit is a matter of concern, finance secretary Ashok Chawla said on Thursday.
India’s monsoon rains were 56% below normal over the past week, government data showed on Thursday, disappointing farmers for a third consecutive week as consumers felt the pinch of rapidly rising food prices.
“It’s a matter of concern, we will respond to it,” Ashok Chawla told reporters when asked about the poor monsoon. He spoke to media after attending the central bank’s board of directors meet in Mumbai.
“Firstly the extent of the drought or the deficit in rainfall has to be assessed. State governments are doing that, they are going to tell us what their requirement is,” Chawla said.
A government source said Prime Minister Manmohan Singh was likely to meet chief ministers of state governments on Monday to discuss the drought-like situation.
“The central government is prepared in terms of being able to supply whatever they need both in terms of agricultural requirements and otherwise,” Chawla said.
He also added that states of Punjab and Haryana have been able to complete sowing despite rain shortfall.
India’s wholesale price index fell 1.74% on 1 August from a year ago, data showed on Thursday, but the food articles index was up 10%.
Earlier this week finance minister Pranab Mukherjee said he expected the economy to expand more than 6% in 2009-10, in line with the central bank’s outlook, although some private economists have warned that the risk is to the downside given the poor monsoon performance.
India’s industrial output expanded at its fastest pace in 16 months in June, beating forecasts by a wide margin, as higher salaries of government employees and stimulus spending boosted consumer demand.
“What is crucial in the overall industrial output number is capital goods has come back. It shows not only is it short-term but the sentiment to bring back private investment is coming back in a major way.”