IBEF: September 08, 2020
The credit ratings agency CARE Ratings in their report said that the favorable monsoon, record kharif crop sowing and high reservoir levels are positive for the agriculture sector that contributes nearly 15% of India’s GDP.
The above factors could push up rural demand at the onset of the festive quarter, can prove to be silver lining for economic growth. The economy is banking on the farm sector to grow by 3.5 to 4 percent across all quarters to prop up GDP growth
Price realisation would be important, to translate into spending power of farmers and all indications are that kharif output would be higher than last year for almost all major crops and will be a critical factor to determine how prices would shape up during harvest time.
Companies associated with consumer goods, appliances and durables and automobiles are hoping on rural growth backed by higher farm incomes, good monsoons and government stimulus.
CARE also quoted that nearly 88 percent of the country received excess to normal rainfalls while 12 percent have had deficient rainfalls so far.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.