SME Times News Bureau | 06 Jun, 2014
Country's Leading Industry Chamber ASSOCHAM recommends the Government to immediately announce steps to control food inflation in view of the impending El Nino and the cascading negative affect it will have on crop production. The MET has predicted below average monsoon this year which might impact khariff crop sowing and production.
It is critical to contain food prices to control inflation as food products comprise 43% of the CPI inflation basket and monetary measures alone cannot effectively reign in inflation. Non-monetary measures must be initiated before El Nino impacts the economy.
About 60 percent of net sown area of the country is rain-fed. The deficit rainfall of 5 percent due to El Nino factor will cause loss to the GDP of about 1.75 percent, i.e. Rs 1.80 lakh crore, which in turn will hurt lakhs of unskilled jobs. With every one percent deficit in rains, the country's gross domestic produce (GDP) falls by 0.35 percent.
The Government needs to make some key announcements on supply side management, logistic management, including warehousing, and implement changes in the APMC act to curb hoarding.
