New Delhi: Expressing concern over the impact of deficit monsoon on the economy, the industry has asked the government to take urgent steps like providing subsidised diesel to farmers and focusing on distribution of high yielding and drought resistant seeds.

Both Assocham and CII said the deficient monsoon would impact employment, income and food prices.

Proposing a 15-point strategy to overcome drought challenges, Assocham suggested the government should incentivise farmers to reduce production cost and increase productivity beside taking effective steps to prevent hoarding and curb speculation.

"Imposing stock limits on commodities like sugar, pulses and onions would help prevent hoarding," it said adding the Forward Markets Commission must keep a close watch on key commodities to curb possible speculation and price increase in the backdrop of poor monsoon.

The drought management must aim at creation of new employment avenues, it said, adding the scope of MGNREG scheme needs to be modified in the drought hit areas.

It called for preparing alternative cropping plan and providing financial and technical help to farmers.

The government should advice banks and financial institutions to settle crop insurance claims in the drought hit areas without delay, it said adding financial loans must be rescheduled to prevent any cases of farmer suicides.

Echoing similar views, CII said the deficit monsoon would act as a double whammy for Indian economy which has already been impacted by the global slowdown.

"Not only will there be an impact on the performance of the agricultural sector but also on other sectors through the effect on rural incomes," CII said.

It said the government must take "urgent measures" to ensure that rural livelihoods are protected.

Any adverse impact on rural livelihoods would also increase the demand for government’s welfare schemes, thereby putting more pressure on the fiscal deficit, it said.

Both the chambers sought measures for enhancing power supply and providing subsidized diesel to farmers for irrigation.

Non-conventional sources of energy need to be explored to supplement power availability in the wake of deficient monsoons,, CII said.

It said the forecast mechanism of Meteorological department also needs an urgent up hauling to enable farmers and related stakeholders to take timely decisions to cope up with any deficiency.

With the monsoon rain deficient by 22 per cent, Prime Minister Manmohan Singh has directed all departments and ministries to coordinate with states to meet any eventuality by monitoring the situation on a weekly basis.

CII said supply chain management of perishables like horticulture and dairy needs to be improved to bridge the gap between wholesale and retail prices.

It also suggested a uniform implementation of the Agricultural Produce Marketing (Regulation) Act across states and immediate delisting of perishables from the APMC list.

"There is need to reduce the dependence of agriculture on monsoons by adopting technologies like drip irrigation, developing drought resistant quality of seeds and promoting rainwater harvesting," it added.

Moreover, FDI in food retail can also help in facilitating big retailers establish marketing chains with farmers and bring in smooth supplies from existing stocks.

"More than 60 years after our independence we remain highly dependent on monsoons for our food supplies and this needs to be corrected," CII said.


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