Kharif loan disbursements down 30 per cent

Farm loan disbursements for the kharif season have fallen 30 per cent due to drought in a majority of the states. According to the data with the National Bank for Agriculture and Rural Development (NABARD), the total credit to the agriculture sector till August 31 was close to Rs 1,10,000 crore, about 34 per cent of the total farm sector lending target of Rs 3,25,000 crore for 2009-10. The kharif season generally accounts for 60 per cent of the total agricultural loans. Till July 31 this year, total short-term crop loan disbursement stood at Rs 74,900 crore, as against the annual target of Rs 2,00,000 crore. B S 240909

Bank credit has grown by Rs 50,407 crore during the financial year up to 11th Sep 09 as against a growth of Rs 1,29,334 crore in the corresponding period last year. Deposit growth during the current FY so far is Rs. 2,55,000 crore. Since April, banks were depositing over Rs 1,00,000 crore on a daily basis with the RBI. But since September 17, there have been only three occasions, including on Thursday, when the level has dropped below the Rs 1,00,000-crore.

India’s monsoon deficit has increased to 22 per cent this year, and the Southwest Monsoon has started withdrawing from the northern region. Decline in paddy acreage is about 6 million hectares. At an average of two tonnes of yield a hectare, the kharif production of rice is estimated to be lower by 12 million tones. TH 260909

The total sowing areas in the kharif season stands at 930 lakh hectares till September 18, compared to 976lakh hectares in the year-ago period. So far, 12 states have declared drought in 299 districts this year. Even as huge cultivable areas were left unsown, the demand for fertilisers was estimated at 250 lakh tonnes (LT). But, the availability of all fertilisers including Urea, Di-Ammonium Phosphate(DAP) and Muriate of Potash (MOP) in the entire Kharif season was only 227 LT till September 24, as per the government data. BS 280909

None of the conditions that made 2002-03 a serious drought are present today. The years 2005-06, 2006-07 and 2007-08 were all above normal monsoon years, when depleted aquifers had time and rainfall to recover. As a result, even if 2009 ends up a meteorological drought, it is unlikely to turn into a hydrological drought as bad as in 2002 for the country as a whole.

Rainfed agriculture areas are hit the hardest by a drought. These are followed by areas dependent on tank irrigation. Only well owners have some protection in tank commands, these can provide a life-saving irrigation. Canal commands under run-of-the river systems are better protected than tank commands because of better-recharged aquifers, but command areas of reservoir-based irrigation systems are even better off as some of the reservoir storage would last even when rivers dry up.

Dugwell irrigated areas dependent on natural recharge are greatly at risk, but

those in canal commands are less affected by drought due to continuous aquifer recharge. By far the best protected areas are those irrigated by deep tubewells, especially in canal-recharged areas like upper Punjab and central Gujarat. Equally well protected are regions like Saurashtra in Gujarat where dug well irrigation is now supported by hundreds of thousands of check dams and percolation tanks over the previous year.’ EPW 120909

Rice and pulses prices soar to 15%

Annual inflation for food articles soared to 15.64% in the week ended September 12, the highest in more than a decade, fueled largely by a 75% rise in potato prices and a 45% increase in the prices of vegetables and sugar. On an annual basis, prices of onions rose by about 20 per cent, cereals by 11.39 per cent and milk by 7.35 per cent.  At the same time, rice got costlier by 14.94 per cent, wheat by 5.12 per cent and pulses by 15 per cent.  PTI 250909

“In the third week of July 08, around the time when the vote on the nuclear deal was to be taken, fearful that it might lose the vote and that elections would have to be held by year-end, and since inflation was running at around 12 per cent, it wanted the Reserve Bank of India (RBI) to do something. The RBI wanted to wait but gave in under severe pressure and raised interest rates.

In the event, the Government won the nuclear vote, and the threat of an early general election receded. Then, six weeks later, quite out of the blue, Lehman Brothers went down, and set in motion a global recession. The RBI took the rap for raising rates at the wrong time, as it had done 14 years ago, when also, exactly the same thing had happened a few months before the general election.”

The RBI, whose job it is to keep an eye on prices, is being its usual shy and coy self. “Consumer price inflation and the prices of food articles continue to remain firm; inflation expectations, therefore, are not moderating commensurately with decline in WPI inflation,” it said demurely in the last review of the economy in July, and sounded ridiculous. It has done little to rein in money supply. T.C.A. SRINIVASA-RAGHAVAN- T H 260909

At least 30 per cent of the 2,742 business executives surveyed across the world regard Indians among the most corrupt when doing business abroad, according to the latest report by an NGO, Transparency International India (TII).

The cost extends to low staff morale and loss of trust among customers as well as prospective business partners. Ultimately, it is citizens who pay: consumers around the world were overcharged approximately $300 billion through almost 300 private international cartels discovered from 1990 to 2005.