Economic Survey 2006-2007

Economic Survey > General Review > Review of Developments > Production


Review of Developments


1.41   The second advance estimates of crop production released by the Directorate of Economics and Statistics, Department of Agriculture and Cooperation on February 5, 2007 has placed total foodgrains production in 2006-07 at 209.2 million tonnes, which is marginally higher than the production of 208.6 million tonnes in 2005-06. Production of wheat and pulses is expected to increase by 4.5 per cent and 8.2 per cent, respectively. Production of commercial crops is expected to be significantly higher. Production of cotton expected at 21.0 million bales is not only up 13.5 per cent from 2005-06, but also an all-time record. Similarly, sugarcane production projected at 315.5 million tonnes is up 16.8 per cent from the output of 270.0 million tonnes in 2005-06. Output of coarse grains and oilseeds are likely to be lower than their levels in 2005-06 by 6.2 per cent and 15.7 per cent, respectively. Production is expected to improve in plantation crops (coffee, tea and rubber); livestock and poultry products; horticulture products; and dairy and fisheries.

1.42   Production of crops, particularly wheat and pulses, has plateaued for some time now. Wheat production reached its peak of 76.4 million tonnes in 1999-2000, which has not been achieved again. In case of pulses, production reached 14.9 million tonnes in 1998-99 and again in 2003-04, but has remained singificantly below that level in the last three years. There has not been any varietal breakthrough in pulses. Though pulses were brought within the ambit of Technology Mission on Oilseeds in 1990 and the centrally sponsored scheme of Integrated Scheme of Oilseeds, Pulses, Oilpalm and Maize (ISPPOM) is being implemented in major pulses-growing States with effect from April 2004, productivity of pulses has remained stagnant. Since pulses are genetically low-yielding; and are grown on marginal and sub-marginal lands under rain-fed conditions, focus needs to shift to micro-irrigation, micro-nutrients, improved production practices and development of improved/better yielding seeds. With overseas availability being limited, reduction in price volatility of pulses will depend on steady growth of domestic production. In case of wheat, there is need for the development of area-specific varieties, particularly to suit the water-abundant eastern region.

1.43   The year 2006-07 not only witnessed sustained growth in manufacturing, but also a distinct improvement in the growth of electricity. With a year-on-year growth of 11.4 per cent during April-December 2006 compared to a growth of 9.0 per cent in the corresponding period of 2005, manufacturing contributed over 91 per cent to the overall industrial growth measured in terms of IIP. Within manufacturing, chemicals, basic metals, machinery and equipments and transport equipments, with a weight of 35.0 per cent in IIP, contributed 55.2 per cent to its growth. All these industries are skill-intensive and produce relatively high value-added products. Growth in cotton textiles and textile products was also in double digits. Poor performance of the sub-sectors of food products and leather, however, continues to be a cause of concern. Both these industries are not only local resource based, but also employment-intensive. In terms of use-based classification, in the current year, higher growth rates were observed in basic goods, capital goods and intermediates. These sectors are expected to sustain these higher growth rates with nearly 85 per cent of the respondents of a Survey conducted by the Confederation of Indian Industry indicating their intentions of making additional investments. Notwithstanding a recovery in the growth in the mining sector to 4.0 per cent in April-December 2006 from 0.4 per cent in April-December 2005, performance of the sector continues to be below par.


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