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05.12.2016 GDP data show rising discrepancies GDP rose 7.3% in Q2, slightly higher than 7.1% in Q1 Discrepancies rose by Rs 41,205 crore whereas GDPexpanded by a little over Rs 2 lakh crore in the second quarter year-on-year. In the first quarter, the respective figures were Rs 25,471 crore and Rs 1.93 lakh crore. GDP rose 7.3 per cent in the second quarter, slightly higher than 7.1 per cent in the first quarter. Discrepancies in the national accounts arise because data on the demand side is not actual data but it is derived from certain ratios. The actual data is supply- side – agriculture, industry and services. Adding indirect product taxes and subtracting give GDP data. Discrepancies emerge on the demand side and not on the supply side of the data. Chief statistician T C A Anant said: “I don’t have all accounts data... I have to provide for errors and omissions as the two sets of numbers are different. Production is actual data. On the demand side, at this stage, we make projection based on rates and ratios and output of certain segments based on the previous year’s estimates.” Growth pangs of GDP In the absence of the full accounting data, there would always be scope for statistical error, he noted. The actual data come 18 months down the line from the close of a financial year. The problem could be rectified to an extent after the Central Statistics Office comes out with a supply use table (SUT). However, there is a lag of release in this table. The office has released SUT till 2014-15 and the work on 2014-15 is under progress. “Once the flow of SUT annually becomes more stable, it may be possible for somebody to look at it more carefully and work out a mechanism of incorporating that understanding into the current computation as well,” said Anant. At the moment, it is the last piece of information in the national accounts puzzle, he said, adding the reason why SUT takes so long to compute is that disaggregated information on which they are based comes after a lag. SUTs are like the input-output matrix but cover more data than the latter. These would cover both services and manufacturing, unlike the input-output matrix, which covers only factory production. The supply table describes the supply of goods and services, which are either produced in the domestic industry or imported. The use table shows where and how goods and services are used in the economy. However, SUTs could be used for annual accounts and not for quarterly numbers, former chief statistician Pronab Sen said. He said it is foolhardy to use SUTs for quarterly estimates even as some countries such as Australia and Canada do so. In quarterly data, it is important not to hide discrepancies, he said. Discrepancies have been on the rise and their growth contributed to one-fifth of the gross domestic product expansion in the second quarter of the current financial year against 13 per cent in the previous quarter. Mahindra Agri picks 60% stake in Dutch fruit distribution company Mahindra Agri Solutions has acquired 60 per cent stake in the Netherlands- based global fruit distribution company OFD Holding BV for about 36 crore (€5 million). OFD Holding owns Origin Fruit Direct, Origin Direct Asia and Origin Fruit Services South America, which are based out of the Netherlands, China and Chile, respectively. Ashok Sharma, Managing Director, Mahindra Agri Solutions, said the acquisition takes the company closer to becoming a significant global player in grapes and is in line with Mahindra’s long term vision of Delivering FarmTech prosperity. The deal gives Mahindra an opportunity to tap new markets in Europe and China and strengthen its existing customer base. Corné van de Klundert, Managing Director, OFD Holding BV, said the deal will strengthen its position as an integrated supply chain company. India has emerged a major supplier of grapes to Europe. The deal is expected to benefit both the companies — Origin Fruits with their strong distribution channel will open up global markets for the Indian farmers and Mahindra will contribute through its strong farmer connect, said Mahindra in statement. Origin Fruit Direct and Mahindra have a supplier-customer relationship which will be further be strengthened to address the market needs. This acquisition gives access to large sourcing base for both the companies across India, South American countries and South Africa and distribution base in Europe (accounting for 24 per cent of global imports of grapes) and China (fastest growing importer with 31 per cent CAGR). OFD Holding BV, which owns Origin Fruit Direct (based out of the Netherlands), Origin Direct Asia (China), and Origin Fruit Services South America (Chile) registered revenue of about €71 million in the year ended October 2016. Bengal ploughs on despite demonetization State’s farmers were already prepared for rabi season; sowing in full swing Abdur Khuddush (50) of Palsit in Burdwan, is stressed. He was late in harvesting kharif paddy and is now sowing potato, over a week behind schedule. The delay had nothing to do with demonetisation, as he was able to draw 50,000 using his Kisan credit card. The real culprit was the climate. West Bengal and its adjacent States witnessed heavy but untimely rainfall late in October. Since wet paddy fetches a low price, harvesting was delayed, as was potato sowing. “You cannot sow potato on wet soil,” Khuddush told BusinessLine. Indeed, this has been the standard response from farmers across Burdwan and Hooghly districts, the largest contributors of the State’s rice and potato output. Nationally, West Bengal ranks second in both categories. The farm sector was able to cope with the sudden cash squeeze, partly due to general preparedness and partly through informal arrangements. Seeds, for example, are stocked in advance. Lenient credit from fertiliser, pesticide and seed dealers also helped. Farmers’ cooperatives, many of which also sell agri inputs, adjusted purchases against loans. Subrata Ghosh, General Manager, HPM Chemicals and Fertilisers, reported a 40 per cent rise in pesticide sales in Bengal in November against the same month last year. Labour affected But cash was an issue in paying labour, for harvesting paddy and sowing rabi crops. The problem was overcome through with arrangements. Wages are paid both in cash ( 200-250 a day) and paddy (2 kg per person a day). Those in dire need got priority for cash disbursals. Most labourers took their paddy and decided to wait for cash. The paddy was bartered for essentials. While farmers in Hooghly and Burdwan denied any major impact from demonetisation, Suvasish Pal, one of the largest fertiliser distributors in Malda district, reported a 20 per cent drop in sales in November. However, he said, sales have picked up in December. “There is now adequate flow of 100 and 2,000 notes,” he said. Kuldip Maity, Managing Director and CEO of Village Financial Services, a microfinance institution, confirmed that there has been a significant rise in rural liquidity in Bengal over the last week. Ghosh of HPM is expecting potato cultivation to increase as farmers got a good price last year. Bankers come forward to help farmers open accounts In order to encourage cashless transactions following the demonetisation of high value currency notes, several banks came together to encourage farmers, traders, and hamalis (porters) open bank accounts at the agricultural marketyard in Karimnagar town on Monday. Following the directions of Collector Sarfaraz Ahmed, the State Bank of India, State Bank of Hyderabad, Andhra Bank, and Indian Overseas Bank came forward to open bank accounts for the farming community and labourers working at the marketyard. The bankers collected their Aadhaar card and photographs for the same. They also erected posters and signboards informing the people about the importance of opening bank accounts for cashless transactions. The bank account opening mela would continue till December 9. A bank official said that they would be educating farmers about how to use ATMs and debit cards. The bankers were conducting a similar mela at Jammikunta marketyard as well. Horticorp giving farmers a raw deal: auditors The auditors found that Horticorp procured a bulk of its vegetables directly from farmers in Palakkad and Idukki. The produce was transferred to Horticorp outlets in other districts “as sales and by adding a margin with the procurement price”. The outlets then sold the vegetables to the public by adding their own high margins. Consequently, the Horticrop “earned an overall margin varying from 50.77 per cent to 241.11 per cent”. For instance, Horticorp procured snake gourd from farmers in Palakkad for Rs.9 per kg. In Thiruvananthapuram, the firm sold the produce for Rs.30.70 a kg. The Corporation earned a 341 per cent profit in the transaction. The farmer received only “29.31 paisa of each rupee paid by the public,” auditors said. Raju Narayana Swamy, Principal Secretary, Agriculture, told The Hindu that anomaly would be rectified. Farmers in Marayur and Kanthallur sold their vegetables mainly to middle men in Tamil Nadu from who they had taken advance money for cultivation. The government would declare major vegetable growing areas as “special agriculture zones.” Horticorp would buy the entire produce without grading. An effective cold chain to preserve produce would be established soon. Steps have been initiated to insulate farmers from agents who also double as loan sharks. Nada effect brings little relief to farmers in Chittoor The Agriculture Department had distributed 400 quintal of groundnut seeds to farmers this season. CHITTOOR: The rain under the influence of the Nada cyclone in Chittoor district has brought little relief to farmers, particularly the groundnut growers, in the western mandals.

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