Nation's GDP under threat as rain Gods play hooky

NEW DELHI: The country's growth prospects don't look too optimistic despite the good news on the industrial front as agricultural output may suffer because of the "rain Gods playing hooky," say experts.

Nearly, one fourth of the country is in the grip of a drought, with the government declaring 177 of about 600 districts as drought-affected.

To tackle the situation, the government has set up an Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee but the prognosis doesn't look too optimistic.

"Though a small negative effect on GDP growth from the poor monsoon can be offset by the combined effect of the ongoing improvement in industrial activity, a bigger hit to agriculture might warrant a downward revision to GDP," Global research firm Macquarie analyst Rajiv Malik said.

Edelweiss, meanwhile, in its recent report has revised down the financial year 2010 GDP estimate to around 5.5 per cent from its earlier 6-6.5 per cent, largely because of the monsoon's impact on agriculture.

Dun and Bradstreet India Head (Economic Analysis) Yashika Singh said "any deficit in the monsoons will not augur well for the Indian economy at this juncture and could prove to be an impediment in the revival phase."