Economy

FinMin sees green shoots of revival led by farm sector

Our Bureau New Delhi | Updated on June 23, 2020 Published on June 23, 2020

The Ministry of Finance.   -  The Hindu

Optimism also stems from higher power use, jump in e-Way Bills, rail freight volumes

The Finance Ministry on Wednesday claimed that economic activity has increased, with agriculture leading the revival.

The Ministry presented a detailed set of dates for various sectors showing green shoots. “The commitment of the Government towards both structural reforms and supportive social welfare measures will help build on these ‘green shoots.’ The resolve for ‘Atmanirbhar Bharat’ will be strengthened with the collective effort of all stakeholders and contribute to rebuilding a strong vibrant Indian economy,” it said in a statement.

Agriculture

The Finance Ministry noted that though agriculture has a lower share (about 13 per cent) in Gross Value Added (GVA), its growth has a very positive impact on the large population dependent on agriculture. Highlighting developments in this sector, the Ministry said that procurement of wheat from farmers by Government agencies touched an all-time record figure of 382 Lakh Metric Tonnes (LMT) on June 16, surpassing the earlier record of 381.48 LMT achieved in 2012-13.

Forty-two lakh farmers have benefited and a total amount of about ₹73,500 crore has been paid to them towards the Minimum Support Price (MSP) for wheat. The procurement of Minor Forest Produce (MFP) under the minimum support price for the MFP Scheme in 16 states has hit a record-breaking high with procurement touching ₹79.42 crore.

As on June 19, farmers have sown 13.13 million hectares of kharif crops, 39 per cent more than in the corresponding period last year, with a big jump in the acreage under Oil seeds, Course Cereals, Pulses and Cotton. Fertiliser sales surged by almost 98 per cent year-on-year in May (40.02 lakh tonnes), reflecting the robustness in the agricultural sector.

Manufacturing

One of the key indicators for the rise in industrial activity is consumption of energy, meaning electricity and petroleum products. During the ongoing month, electricity consumption has continuously improved from (-)19.8 per cent in the first week to (-)11.2 per cent in the second week to (-)6.2 per cent in third week of June. Electricity consumption saw lower contraction in growth rates from (-) 24 per cent in April to (-) 15.2 per cent in May to (-)12.5 per cent in June (till June 21).

Similarly, consumption of petroleum products increased by 47 per cent from 99,37,000 metric tonnes in April to 1,46,46,000 metric tonnes in May. Consequently, the year-on-year contraction in consumption growth of petroleum products was much smaller at (-)23.2 per cent in May as against (-)45.7 per cent in April. In June, growth in consumption of petroleum products is expected to be still higher after one month of Unlock 1.0.

India’s PMI Manufacturing and Services showed a smaller contraction in May at 30.8 and 12.6, respectively, over April (27.4 and 5.4, respectively). Total assessable value of E-Way bills picked up by a massive 130 per cent in May (₹8.98 lakh crore) compared to April 2020 (₹3.9 lakh crore), though lower than previous year and pre-lockdown levels. The value of E-Way bills generated between June 1-19 stood at ₹7.7 lakh crore.

Services

Railway freight traffic improved by 26 per cent in May (8.26 crore tonnes) over April (6.54 crore tonnes), though it is still lower than the previous year’s levels. The improvement is likely to continue in June in sync with growth in movement of goods on National Highways.

Average daily electronic toll collections increased from ₹8.25 crore in April to ₹36.84 crore in May, rising more than four times. In the first three weeks of June, collections have improved further to ₹49.8 crore.

Published on June 23, 2020
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