Govt should raise more resources to tackle drought: Rangarajan

NEW DELHI: Warning that farm sector distress can have serious consequences on the economy, PMEAC chairman C Rangarajan on Wednesday asked the government to raise additional resources to provide relief to drought-hit people and increase import of essential commodities to check price rise.

"Distress in agriculture (due to drought) will have other serious dimensions. The government may have to find additional resources to meet the requirements of the affected people," he said after taking over as the head of the Prime Minister's Economic Advisory Council (PMEAC) for the second time.

As regards the impact of drought on economy, he said, the growth rate could slip to 6-6.5 per cent from 6.7 per cent in the previous fiscal.

"The Indian economy has been doing well in the past several years but the growth rate came down to 6.7 per cent last year because of the impact of international financial crisis... this year the economy will grow between 6 and 6.5 per cent. The drought will have dampening impact on the overall growth rate," he said.

"As a result of the drought there is a tendency of the prices to rise... the stock of foodgrains available with the government is large... but wherever there is a scarcity and where imports are possible we should do it. If the production of pulses fall there should be a greater effort to import pulses," he said.