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The pace of expansion in the agricultural Gross Value Added (GVA) growth will moderate slightly to 4.5 per cent in the first quarter of the current Financial Year (FY) 2025-26, the rating agency ICRA said in a report.
The estimates are down from 5.4 per cent in the previous quarter. An increase or decrease in Agri-GVA impacts rural incomes, consumption, and overall economic growth, the report said. It helps control food inflation, benefiting monetary policy, and signals stronger agricultural output. The figures can also attract more investment into the agri and rural sectors, improving food security and export potential. However, despite the dip, the outlook of the rating agency remains robust, supported by strong output from rabi and most summer crops. For the full fiscal year FY2026, ICRA expects GVA growth in agriculture, forestry, and fishing to ease to 3.5-4.0 per cent, compared to the provisional estimate of 4.6 per cent in FY2025, assuming a healthy Kharif season. According to the rating agency, moong, rice, and maize witnessed healthy growth in sowing, while soybean, arhar and urad trailed the year-ago levels. The area sown under pulses stood at 72 per cent of the normal area as on July 25 vs 69 per cent in the year-ago period. On a YoY basis, it is up by 3.5 per cent, led by moong (+16.1 per cent) while arhar (-8.1 per cent) and urad (-6.7 per cent; wherein sowing extends till mid-Sept) declined. Acreage under oilseeds contracted by 2.2% YoY; led by sunflower (-5.1 per cent), soybean (-3.8 per cent) and niger (-86.4 per cent), coupled with muted growth in groundnut (+1.0 per cent). The credit rating agency said that the IMD's expectations of above-normal rainfall during August-September 2025, coupled with the prevailing neutral El Nino, augur well to support the sowing of Kharif crops, although the distribution of rainfall across the country needs to be monitored during the rest of the season. India received above-normal rainfall (105 per cent of long period average or LPA) in July 2025, mildly lower than the India Meteorological Department's (IMD) forecast (>106 per cent of LPA) for the month, amid the dip seen in the second half of July (0.5 per cent below LPA), compared to July 1-15 (11 per cent above LPA), which significantly impacts the agriculture sector. After an early onset, the progress of the monsoon was slow in early-June 2025, with the pan-India rainfall remaining deficient at 69 per cent of LPA until June 15, 2025. Thereafter, it picked up, with excess rainfall at 133 per cent of LPA seen during June 16-30, 2025. (ANI)
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