The hope that the agricultural sector will support the country's economy is likely to be thwarted ...

Given the spread of the second wave of corona to rural areas of the country, the slowdown in kharif planting as the monsoon lengthens in June and the looming risk of a third wave, the contribution of the agricultural sector to the country's economic growth rate in the current financial year is doubtful. Last year, the growth rate of most sectors of the economy was negative amid the Corona epidemic, while the agricultural sector grew by more than 3 per cent. As a result of the good performance of the agricultural sector, even in the midst of the first wave of corona in 2020, there was no significant adverse effect on rural demand, which resulted in a negative overall growth rate. Compared to the first wave, the second wave was quite the opposite and took rural as well as urban areas under its sway. The effect of the second wave was also seen on the harvest of rabi crop.

The situation is currently getting more complicated as the health infrastructure in the rural areas of the country is weak and there is a lot of time being spent in getting testing and medical treatment. In such a scenario, policymakers will need to pay special attention to the demand at the village level, which was encouraging last year. While the second wave of the Corona has been so severe that farm laborers are terrified of coming to work, it would not be wrong to say that any condition of the third wave will not remain unaffected by farm work.

The monsoon of the current year was initially forecast to be good but in June the monsoon was late in many parts of the country and due to this kharif sowing operations are also slowing down, in which case any decline in agricultural production could affect rural demand. There is no denying the possibility of a decline in the purchasing power of farmers and farm laborers due to low production. As the country's corporates rely heavily on rural areas for their demand, it remains important for them to keep an eye on agricultural operations in the current kharif season.

While the second wave is not yet fully settled, there is a risk of a third wave in the next one to two months, which is exacerbating the situation. During the first wave, a large number of workers from urban areas fled to their homeland and engaged in farming. Rural demand remained strong last year due to the workers staying in the homeland for a long time. The picture is different in the second wave this year and workers have avoided going home and opting to stay in urban areas for employment.

As monsoon is forecast to be good this year, it would be premature to assume that rural demand will be good at this stage. Fifty per cent of the total income of the country comes from the rural economy. In terms of employment, more than fifty five percent of the people of the country are engaged in agriculture and allied occupations.

The impact on income in rural areas can have a serious impact on demand for goods and services. Unemployment rate is also high in rural areas. Urban areas are also seeing a decline in remittances from cities to villages due to high unemployment and declining incomes.

In 2030, signs of the country's exit from the economic downturn caused by the Corona began to emerge from rural areas. Sales of tractors, two-wheelers and FMCG products grew in rural and second tier cities, but no such signs have been seen so far this year. During the last kharif season, workers from various industries migrated from the cities to engage in farming, resulting in higher demand in rural areas.

Minister of Agriculture Rural demand has been very important in India even after independence. The country's economy is based on villages, as the profitability of companies depends heavily on rural demand. At a time when demand for non-food items in cities has been declining for the past two years, measures to boost rural demand are needed to sustain the country's economic growth.

In the days to come, it remains to be seen how rural areas will become the engine of the country's overall development as efforts are being made at the government level to boost demand through employment in rural areas. The picture is that the vaccination program in rural areas is not growing as fast as it should in comparison to cities. There has been widespread misunderstanding in the villages regarding corona and villagers are avoiding taking the vaccine say they are afraid to take it. If the country's villages are to be protected from the proposed third wave, the misconceptions and fears about corona and vaccines will have to be removed. It is a fact that if adequate vaccination program is not carried out in the villages, the good monsoon will not have a positive impact on the rural economy. The government has to make sure that the villagers come forward for the vaccine. The vaccine will help increase local activities, especially farming and allied activities and other trade, which in turn will increase demand. It is a fact that while the reins of the economy are in the hands of rural consumers, the security of these consumers will be supportive of the country's industries and the economy as a whole.