India's economic growth slides amid drought warnings



NEW DELHI // India's farm minister, Sharad Pawar, has warned that the country could be facing a drought that is worse than the one in 1972.

A group of the nation's ministers will meet on Wednesday to consider policy measures to counter the impact of the drought, he added.

He made the comments during a meeting of the Nationalist Congress Party in Mumbai yesterday.

They came after a government policymaker said that India's economic growth could slip to close to six per cent this year, with the country facing the spectre of its third drought in a decade.

In the last few months, the outlook for once-booming India has worsened with high inflation, steep interest rates, a ballooning deficit, nosediving business confidence, a falling currency and now growing fears of a devastating drought.

"If we factor in that agriculture which will not be strong ... [growth] will be closer to six per cent" for the fiscal year to March 2013, said Montek Singh Ahluwalia, the planning commission deputy chairman.

His forecast, delivered on Friday, is down from the 6.5 per cent expansion India notched up last year, and far below the close to 10 per cent expansion seen during a good part of the past decade.

It comes as private economists also pare their growth estimates for Asia's third-largest economy, citing concern about the "deficient" monsoon rains that sweep India from June to September.

A survey of economists and industry leaders by the Associated Chambers of Commerce and Industry of India, which was released on Saturday, said that the weak monsoon and a deteriorating global situation were expected to cut growth to between 6 per cent and 6.3 per cent.

The weather office, meanwhile, has forecast that the rains will be "15 per cent deficient" during the monsoon period.

A countrywide drought is declared if the rainfall drops below 90 per cent of average annual levels.

In 2002 and in 2009, India was hit by drought, bringing misery to farmers and driving up food prices.

Already "the drought in Maharashtra [state] is the worst in last 20 years, the Gujarat drought is the worst in last 25 years and the Karnataka drought is the worst in last 40 years," said Jairam Ramesh, the rural development minister.

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