New Delhi: The government announced a relief package of about Rs 2,000 crore as well as a 50% diesel subsidy for the rain-starved states of Maharashtra, Karnataka, Rajasthan, Haryana and Gujarat, finally conceding that India runs the risk of a drought.
The burden of the diesel subsidy is to be shared equally between the Centre and the states.
While the move will likely marginally mollify farmer sentiment, with half of India reeling under a severe power deficit and all of it facing a generally weakening economic climate, the proposed payouts are likely to put additional pressure on an already overburdened treasury.
A farmer waits for rain on his drought hit paddy field (AFP)
Agriculture minister Sharad Pawar admitted that there would be “some setback” in the overall crop output on account of deficient rains, but added that he was banking on rains in August and September to make up for this. “There will be some setback, but we’re hoping favourable rainfall in the remaining months, and only after the season ends can we know the actual impact on farmers,” he told reporters after a meeting of the ministerial panel on drought.
The government is doling out relief packages for rain deficient states as India runs the risk of a drought. Ruchira Singh tells us more.
Pawar also said the current year’s rain deficit situation is worse when compared with the drought of 2009 in terms of the number of districts affected.
While the delayed and deficient rains have caused many farmers to miss this sowing season, rains in August and September will ensure they don’t lose the next. Nearly 60% of land under crops in India is rain-fed, and most of this depends on the June-September south-west monsoon.
Rains in August and September are unlikely to be munificent, with experts, including the India Meteorological Department, expecting the El Nino effect to hit India by the middle of August. Consequently, September rain is likely to be at least 10% below the normal quota of 17cm. El Nino is a weather phenomenon arising in the Pacific Ocean where higher surface temperatures affect usual weather patterns in many parts of the world, including India.
“It is certainly going to be a meteorological drought, in that rainfall is going to be well below 90%,” said a weather official who didn’t want to be identified. “September is going to get less rain than it usually does.”
Pawar said it was up to the states to decide whether they are facing a drought.
A meteorological drought implies an all-India rainfall deficit of at least 20%. Such a drought that spans at least 20% of the country is termed an all-India drought year. Typically, such classifications are officially made after the monsoon withdraws in October, though individual states can declare a drought much before that.
The ministerial panel was chaired by agriculture minister Pawar and included rural development minister Jairam Ramesh.
As of Tuesday, India’s monsoon rain was deficient by 20%, with vast parts of southern, central, northern and western states reeling under extremely dry conditions that have prevented sowing of crops. But the government has shied away from calling it a “drought”.
As of last Friday, when the government announced updated sowing data, total sowing of kharif (summer) crops was off by nearly 10% from the previous year, at 66.824 million hectares. While this is an improvement from the previous week’s nearly 14% contraction in area, there are concerns that the late sowing could impact yield.
Abhijit Sen, member, Planning Commission, said the financial package was only the first of a series of steps to manage the drought and that the situation could be slightly worse than in 2009.
“In 2009, we didn’t have this power crisis. Now, the current situation may hike diesel prices a little more, but ultimately it won’t really cost the exchequer much,” Sen said. “That said, the government should have moved slightly faster this year with their decisions today.”
The deficient monsoon rainfall has hurt hydropower generation significantly, putting more pressure on thermal power generators as demand for electricity rises from consumers for cooling needs and farmers for irrigation via electric pumps.
“Already there is a high demand for coal. The current situation will put additional pressure on our supplies,” said S. Narsing Rao, chairman of Coal India Ltd, the world’s largest coal miner that accounts for about 80% of India’s output of the commodity.
Rao said power plants usually shut for maintenance during the monsoon season that gives Coal India some “breathing space”.
“This year it will not be so,” he said. “This quarter, I anticipate our supply to the power sector will have to be similar to the first quarter, which is around 96 million tonnes (mt).”
Hydropower generation in April and June fell 8.8% from last year, showed a research report from Barclays Capital that used data from the Central Electricity Authority of India.
“This year, an additional 8-9 mt of thermal coal imports can happen because of poor monsoon,” Chirag Shah, director (research) at Barclays, told Mint. “Last year, we imported 88 mt of thermal coal. This can rise to 120 mt in 2012-13.”
Pawar said Karnataka, Maharashtra, Gujarat, Haryana and Rajasthan will get funds for drinking water programmes, and watershed and drought-proofing programmes.
The ministers will make a survey of the states that are affected and will have another meeting soon, he added.
Pawar also said there would be an enhancement of seed subsidies and augmentation of fodder programmes.