14 Jul 2010 2:09 PM

First quarter of fiscal 2010-11 has been good for agriculture, industry

Indian farmers have lots to cheer about this year. Production of major crops is projected to rise by 7.8 per cent in 2010-11. Kharif sowing has been progressing at a satisfactory pace. The acreage of all crops, barring cereals and pulses, was higher than year-ago levels as on June 25. Cumulative rainfall in the first five weeks of the current monsoon season was 204 mm, compared to the long period average (LPA) of 226.5 mm. The India Meteorological Department has forecast that this year's rainfall will be 102 per cent of the LPA. Fiscal 2009-10 was a drought year, and production of major crops had declined by 5.3 per cent.

Fiscal 2010-11 started off on a good note for Corporate India too. Industrial production grew by an impressive 17.6 per cent in April 2010. It is projected to grow by 9.2 per cent in 2010-11. This growth is expected to be broad-based, with food products, beverages / tobacco, non-metallic minerals, machinery and the transport equipments sector likely to report over 10 per cent rise in production.

In the quarter ended June 2010, announcement of investment intentions spiked to Rs.5.8 lakh crore. Projects being implemented rose by 43 per cent year-on-year to Rs.55.7 lakh crore in June 2010. Projects valued at Rs.6.5 lakh crore are scheduled to be completed in 2010-11. All these indicate that capital formation in the current fiscal will be much higher than in the preceding year.

Real GDP is estimated to have risen by 9 per cent in the June 2010 quarter. The manufacturing sector and the trade-hotel-transport-communication segment of the services sector are likely to be the major drivers of this growth. Real GDP is projected to grow by a robust 9.2 per cent in fiscal 2010-11.

Krishna Warrier
kwarrier@cmie.com