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India’s agricultural GVA growth is likely to be 4 per cent during third quarter (October-December) of current fiscal, but may slide to a record 3 per cent growth in next quarter. Improved fertiliser availability and healthy reservoir storage levels along with a likely increase of rabi sowing areas by 1-2 per cent from year-ago level will help the farm sector’s overall growth, according to a report by rating agency ICRA.
Rabi sowing rose by 4.4 per cent until December 23 from year-ago, covering 89 per cent of the total area sown in the 2021 season. “Given the brisk sowing, improved fertiliser availability and healthy reservoir levels, rabi sowing in FY2023 is expected to exceed year-ago levels,” the agency said.
The agricultural GVA growth estimated at 3 per cent for the last quarter of current fiscal is due to base effect. The agri GVA growth in Q4 of FY22 was over 4 per cent.
The agency also said that overall farm sector GVA growth is projected to rise to 3.9 per cent in FY23 as against 3 per cent registered in FY22.
The GVA of agriculture, forestry and fishing has grown by 4.5 per cent in H1 FY23, even as the first advance estimates for kharif crop production displayed a mixed y-o-y trend for FY23, the ICRA report said. The GVA of other sub-sectors such as livestock and fisheries, recorded a CAGR of 6 per cent and 6.7 per cent, respectively during FY2017-21, higher than the 2 per cent growth seen in the crops sector in the period.
“The spell of excess rainfall during September-October 2022 is likely to have dampened yields, thereby posing some downside risk to the First Advance Estimates. However, the earlier fears of widespread crop damage now appear unfounded,” it said.
Further, it said that reservoir storage on a pan-India basis stood at 77 per cent of live capacity at Full Reservoir Level (FRL) as on Dec 22, higher than the year-ago as well as historical average levels, which aided in accelerating the pace of the sowing of rabi crops.
Rabi sowing is likely to exceed the year-ago levels in the ongoing season by 1-2 per cent, entailing an additional area of 8.7-9.4 million hectare in the remainder of the season against 10.6 million hectare in the same period of last fiscal.
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