The rural economy and the agriculture sector have become more resilient over the past 15 years, supported by growth in allied activities, higher irrigation coverage, greater farm mechanisation, and improvements in crop and seed varieties, Reserve Bank of India (RBI) Deputy Governor Poonam Gupta said on Tuesday.
Speaking at the post-policy press conference, Gupta said the resilience of the rural economy has strengthened over the years, reducing the impact of rainfall deficiencies and weather-related uncertainties on agricultural output.
She said agriculture and allied sectors had increasingly complemented each other, with allied activities performing well in the years when agricultural output was weaker.
“If you look at some of the measures by the government, the share of area that is irrigated now is much larger, and it’s a secular increase, which means though the rainfall deficiency and vagaries matter, they matter less than they used to in the past,” Gupta said.
She added that greater access to agricultural credit, higher farm mechanisation, and improvements in crop and seed varieties had also strengthened the sector.
“All in all, all of these measures indicate towards a well-doing rural economy and a very resilient agriculture sector,” she said.
Responding to a question on whether government measures would be sufficient to protect rural demand from the impact of El Niño conditions, RBI Governor Sanjay Malhotra said the monsoon was still evolving, and it was too early to conclude.
“The monsoon is still evolving. El Niño conditions have developed, but then there is the other opposite dipole that you have that could perhaps counter some of the El Niño,” he said.
Malhotra said the agriculture sector had demonstrated resilience over the years, with allied activities helping households offset income losses during periods of weaker farm output.
“We have seen that if agriculture is not doing well, then the allied activities do better. The households are able to themselves adjust their own activities to generate income and offset some of the loss in incomes that we have seen,” he said.
