Datanomics: Met accuracy improves; farm GVA shifts slightly from crops

Improving monsoon forecasts and a gradual shift from crops to livestock are reducing agriculture's direct impact on India's overall economic growth

Even as the India Meteorological Department has forecast a sub-normal monsoon this year, the economic impact may be limited. The met’s forecast accuracy has improved, and the farm sector’s impact on overall growth has fallen, due to a shift from monsoon-dependent crops to resilient segments. 

 

Farm growth has declining impact on overall GVA

 

Farm and allied sector gross value added (GVA) contracted in FY14 and could merely grow in the subsequent year due to deficient monsoon but overall GVA growth was 7.2-8 per cent in those years. Other years also corroborated this point. 

 

Farm’s share in overall GVA falls

 

However, it would be a sweeping statement to say that the overall economy is decoupled from the farm sector. This is so because the sector still accounted for 16.78 per cent of India's GVA in FY26, even though less than 18.20 per cent in FY15. 

 

Crops still account for half of agri despite share drop

 

Monsoon variability heavily affects crops, leading to a decline in crop GVA in deficient monsoon years like FY14, FY15. However, crops’ share in farm GVA fell to 54 per cent in FY25 from 62 per cent in FY15, while livestock rose to 31 per cent from 24 per cent.