Finance ministry said on Friday that there was no cause for "panic" due to scanty rains in many parts of the country and it was too early to call it a drought, but expressed the fear that delay in monsoon was sure to affect agriculture productivity.

Finance secretary D C Gupta told PTI that the economy was resilient enough to overcome any setback in the farm sector, while exuding confidence that performance of industry and services sectors was sure to keep the growth momentum.

Pointing out that many analysts and economic research agencies were still confident about GDP growth being upwards of 6.0 per cent, Gupta said that HSBC has projected GDP growth at about 6.5 per cent even if there is zero agriculture growth.

"We don't see any reason to change growth forecast. In the beginning of the year it was projected at 6.4 per cent to 7.3 per cent," he said adding that the same was also projected in the budget for 2004-05.

Reiterating that the government was keeping a watch on the rain situation, he said that the finance ministry was not taking an "alarmist" view though "we are keeping our vigil to meet any situation and provide relief to states."

Some states have asked for some relief and the Centre has already dispatched few lakh tonnes of foodgrains but the quantum of relief and provisions for grains as per norms would be reflected in the revised estimate of the budget, Gupta said.

The agriculture ministry was keeping a total watch on the situation and had sent teams to various states that were reporting either drought conditions or delayed rains, he said.

The finance secretary said the Centre had provided about 59 lakh tonnes of grains (valued at about Rs 5,900 crore) to drought-hit states during 2002-03 and another 53 lakh tones during the last fiscal.

He dismissed fears that drought and flood relief would affect the government finances and lead to higher fiscal deficit, saying, "We will find the resources."