An economic outlook report from the Centre for Monitoring Indian Economy (CMIE) forecasts that farmers will reap nearly 11.8 per cent growth in income supported by the prices of farm market. The report suggests that the shrinkage in the 2022-23 Kharif crop may not reduce Indian farmers’ income.
The mandi prices of all important Kharif crops except ragi and soyabean are ruling higher than their previous year’s rates. Moreover, rice, maize, jowar, cotton and groundnut are going record highs.
The report further said that the post-Covid corporate profit boom does not seem to have withered away completely despite rise in commodity prices. Early results of listed companies display a robust growth in the topline accompanied by an unimpaired bottom line.
The interest rate hikes by the RBI to counter inflation do not seem to be bothering corporates much as they do not have large capex plans on hand. In fact, corporates who have parked their bumper profits in treasuries stand to gain from the interest rate hike.
The CMIE report said that news coming from India’s farming hinterland is not bad either. Rising crop prices are likely to more than offset the fall in kharif crop output, rendering a healthy growth in farm income.
Currently, one of the downers for the Indian economy is high imported energy inflation, which is widening the trade deficit and exerting pressure on the Indian rupee in absence of adequate foreign capital inflows, the report added.
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