Agri growth pegged at 7-year low of 1.8% in FY24 due to poor Kharif harvest

However, some experts said the GVA numbers could stand to be revised as the initial estimates are based on extrapolation of figures for five-six months and a final picture will emerge only around Feb

The agriculture sector is projected to see a growth of 1.8 per cent in the FY24, a seven-year low, due to poor Kharif harvest and weak initial sowing of Rabi crops, according to the first advance estimates of national income released by the National Statistical Office (NSO) on Friday.

However, some experts said the Gross Value Added (GVA) numbers could be revised as the initial estimates are based on extrapolation of figures for five to six months and the final picture will emerge only around February. 

“Nonetheless, this is a disappointment as we were expecting agriculture GVA to be somewhere around 3-3.5 per cent in FY-24,” said Madan Sabnavis, chief economist at Bank of Baroda.

As per first estimates, production of almost all Kharif crops is down in 2023-24 due to uneven rainfall while the initial sowing of some Rabi crops like chana has also been impacted because of deficient soil moisture. The data also showed that at current prices, GVA for agriculture, forestry and fishing is projected to grow at 5.5 per cent in FY24 as against 12.1 per cent in FY23. This translates into an inflation impact of 3.7 per cent in FY24 as against 8.1 per cent in FY23.

As per the first advance estimate released a few months ago, production of rice, the main crop during the Kharif season, could drop by 3.79 per cent in 2023-24 to 106.31 million tonnes as compared to the 110.5 million tonnes as per the final estimate of 2022-23 due to uneven monsoon. The estimate also showed that production of all major Kharif crops this year could see a dip with moong, urad, soybean and sugarcane leading the pack.

The area covered under rabi crops till January 5, 2024 was 1.24 per cent less in comparison to the previous year mainly due to a drop in acreage under chana, the main pulses grown in the country. Chana acreage has gone down due to deficient soil moisture in some of the major growing states due to poor monsoon and post-monsoon showers.

The southwest monsoon in 2023 was highly uneven and skewed mainly due to the adverse impact of El Nino. Statistically, the June to September season ended with a deficit of 5.6 per cent which classified the 2023 monsoon as ‘below normal’, the first in more than four years.