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The Finance Ministry, in its latest monthly review, has projected a significant boost in Rabi crop sowing and production in the coming months.
The ministry noted that the key factors contributing to this positive outlook include higher minimum support prices (MSP), a favorable monsoon, and sufficient reservoir levels. The ministry emphasized that the Rabi season is likely to benefit from the strong foundation set by a good Kharif harvest earlier this year. This bumper harvest is also expected to help ease domestic retail inflation, which had risen in October due to food price pressures. "As of 6th November 2024, paddy procurement reached 161.0 lakh metric tonnes, benefiting 14.79 lakh farmers from the ongoing KMS procurement operations. The record Kharif food grain production with increased MSPs will further strengthen the rural economy" said the ministry. Rabi crops are sown in winter and harvested in spring, while kharif crops are sown in early monsoon and harvested in autumn. Rabi crops require a cold and dry climate, while kharif crops need a hot and wet climate. It also added "A bumper kharif harvest is expected to lower food inflation in the coming months. Favourable monsoon, adequate reservoir levels and higher minimum support prices are likely to boost Rabi sowing and production". As per ministry the food inflation in October was primarily driven by supply disruptions caused by heavy rains in major producing states. This led to price spikes in essential vegetables like tomatoes, onions, and potatoes. Additionally, high global prices contributed to inflation in edible oils and fats. However, the abundant Kharif harvest is anticipated to stabilize food prices and bring relief to consumers in the months ahead. The report also highlighted strong demand trends in the economy, with steady growth in both urban and rural areas. Fast-moving consumer goods (FMCG) sales volumes improved during the second quarter of FY25, reflecting robust consumer confidence. It added that rural demand has been particularly noteworthy, as evidenced by record-breaking tractor sales and strong growth in two-wheeler sales in October 2024. "Demand continues to grow steadily as indicated by improving FMCG sales volumes in Q2 FY25 in both urban and rural areas" it stated. On the supply side, the ministry added that the economic activity remains healthy, with the Purchasing Managers' Index (PMI) for manufacturing and services indicating robust performance in the secondary and tertiary sectors. With favorable conditions and government support, the Rabi season is poised to drive agricultural growth while supporting broader economic stability. The ministry remains optimistic that the combined effect of these factors will not only boost production but also provide relief from inflationary pressures in the near term. (ANI)
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