Step one: acknowledge it

States like Uttar Pradesh, Rajasthan, Punjab and Haryana have been among the worst hit with more than 50 to 100 per cent of the districts recording serious deficiencies.

It is against such a backdrop that Union Agriculture Minister Ajit Singh spoke of the agricultural situation in the country being the worst in 12 years. Some others have suggested that the current year may be the worst in 30 years that is, comparable to the drought year of 1972. There are clear indications that the kharif output is likely to take quite a beating this year.

According to the available official estimates, till early-August, the area under paddy was just about two-thirds of what it would have been in a normal year. Similarly, in the case of coarse cereals, the area sown has been 14 million hectares against the corresponding figure of 20 million hectares.

Area decline among coarse cereals has been particularly sharp in the case of bajra, which is of the order of 50 per cent, and there have been substantial falls in the case of other important staple crops such as jowar and maize.

In the case of pulses, the story seems as dismal in several states, and the oilseed crops in states such as Madhya Pradesh, Andhra Pradesh and Rajasthan have suffered serious setbacks.

In short, quite a few crops have been affected adversely in terms of area sown due to deficient monsoon. To make matters worse, a substantial proportion of the crops in the area sown have been damaged so badly for lack of water that it may be advisable to write them off.

Consequently, even though precise quantification may be difficult at this stage, the fact of a very serious erosion of farm incomes in the current year appears to be beyond any doubt. It seems that there has been some revival of the monsoon in the latter half of August, but it may already be a case of too late if also not too little.

In view of such a scenario, occasional comments during the last couple of months, mostly from ill-informed quarters, which house many of the cheerleaders of economic liberalisation in India, trying to suggest that the failure of monsoon will have negligible impact on the overall performance of the Indian economy, are almost in the realm of the absurd. This is so for several reasons.

The central government8217;s own Economic Survey for the last financial year paid glowing tributes to the buoyant agricultural sector for facilitating a GDP growth of 5.4 per cent.

Obviously, not much has changed between the last year and now, in term of the linkages between the performance of the agricultural sector and the overall performance of the Indian economy. Agriculture may account for just about a quarter of the national income these days, but in term of its forward and backward linkages with several industries and activities in the rest of the economy, the story is far more complex.

For instance, the current failure of monsoon must have made industries such as fertiliser, cement, steel etc. in corporate India particularly jittery. Similarly, it is likely that, along with some declines in our ago-exports, India may have to import well over an extra million tonnes of oilseeds or a substantial amount of edible oil, thus putting much pressure on our import bills in spite of our supposedly comfortable forex situation.

Going beyond the specific linkages, the basic argument may be stated simply as follows: a substantial contraction in agricultural output and income is bound to have a significant negative impact, due to a significant drop in purchasing power, regarding the prospects for non-agricultural sectors and thus the overall growth of national income.

Sure enough, some amount of damage containment may be possible if the government opted for a well-conceived relief strategy in which the bulging stocks of 65 million tonnes of rice and wheat may play an important role through food for work programmes, maybe to strengthen rural infrastructure.

But that would obviously imply an increase in the budgeted food subsidy. Given the ruling dispensation8217;s aversion to so-called 8216;fiscal imprudence8217;, it is unlikely that such a strategy would find favour with them.

One may note here, though, that only a couple of days ago the central government has announced a bail out package for the Unit Trust of India, at a cost which may be higher than launching substantive full-scale food for work programmes, to get it out of the dire straits that it got into due to its speculative misdeeds spread over almost a decade. It should be obvious enough that the definition of 8216;fiscal imprudence8217; itself depends on the classes and political constituencies being affected.

Finally, apart from quibbling over the precise quantitative impact of the performance of the agricultural sector on national income, there is the simple fact that almost 70 per cent of India is still economically dependent on agriculture in important ways, and the overwhelming majority of them, such as agricultural labourers, marginal and small farmers, have been hit by the current drought where it hurts most.

A nation wide human tragedy, threatening the livelihoods of millions has unfolded and the government8217;s response appears to be far from adequate.

The writer teaches at the Centre for Economic Studies and Planning, JNU