As the actual rainfall of 116 per cent of the long period average (LPA) in August 2024 exceeded the Indian Meteorological Department’s forecast of 94 to 106 per cent of LPA, the cumulative Kharif sowing was up by 1.9 per cent on a year-on-year basis as on 27 August 2024. Based on the ongoing sowing and the bright prospects for Rabi crops, the gross value added (GVA) growth of agriculture to improve to 3.2 per cent in the current financial year.
The report stated that the cumulative Kharif sowing has benefitted from the surplus rains in the monsoon season. The sowing has already covered around 96 per cent of the final acreage of last year and the overall sowing is expected to cross the figure by 1 to 2 per cent by the end of the current season, as per Icra.
As the states of Maharashtra, Karnataka and Madhya Pradesh received normal to excess rainfall, the sowing of rice, pulses, coarse cereals and oilseeds was higher on a YoY basis by the end of August 2024.
The forecast for the Rabi season is also favourable due to the elevated reservoir levels. The report stated that the excess rainfall has aided the pan-India reservoir storage to rise from 20 per cent of live capacity at full reservoir level (FRL) in June 2024 to 80 per cent at the end of August 2024. This is expected to support the timely onset of sowing, as per the report.
Icra has projected the GVA growth of agriculture, forestry and fishing to improve from 1.4 per cent in FY24 to around 3.2 per cent in FY25. However, the report stated that rural demand is expected to report a healthy recovery only in the second half (H2) as the status of Kharif crop output and farm cash flows will only become clear by that time.
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