Discounting for the base effect of lockdown versus unlock, the reality is that the economy is far from showing any signs of recovery from the slowdown that it was in. A comparison of estimates of consumer durable sales and demand for electricity with comparable numbers from last year would suggest that the rebound is not yet strong enough to claim any recovery in the economy. However, with monsoon rains expected to be good this year as well, agriculture is the only sector likely to see robust growth.

The agricultural sector was also the one with the third highest growth last fiscal year, after public administration and financial services and real estate, with real growth of more than 4%. Given the base effect, it is unlikely that agriculture will witness a much higher growth than what was achieved in 2019-20. The issue is whether our farm sector growth at 4-5% is sufficient to pull the rest of the economy up at a time when other sectors are witnessing negative growth. While agricultural growth may be statistically irrelevant, given that agriculture contributes only 15% of national income, it remains a major driver of economic activity, given its ability to spur demand in the rural economy, which has been in distress for a long time. There is now a consensus that the current slump is primarily a result of declining demand. Therefore, the relevant way to measure the effectiveness of agricultural growth is to track the growth in farmer incomes, rather than farm output growth.