GVA Growth Of Agri, Forestry, Fishing To Rise To 3.7% In FY25: Icra

Aided by excess rainfall at 102 per cent of long period average (LPA) in June-July 2024 and the Indian Meteorological Department’s (IMD) forecast for above-normal rainfall during August-September 2024, the Gross Value Added (GVA) growth of agriculture, forestry and fishing is set to improve to 3.7 per cent in FY2025, from 1.4 per cent in FY2024, as per Icra.

As of 26 July 2024, the cumulative area sown under kharif crops increased by 2.3 per cent year-on-year (YoY) basis. However, the excess rainfall for a longer period could harm the standing crops and yields, Icra noted.

The majority of crops under pulses, coarse cereals and oilseeds registered a YoY growth in Kharif sowing. Pulses witnessed YoY uptick of 14.1 per cent, coarse cereals registered five per cent YoY increase along with a 3.8 YoY growth in sowing of oilseeds as on 26 July 2024.

However, Icra stated that the rural demand is expected to register a recovery in H2 FY2025 after there is a clear picture about the output of kharif crop and farm cash flows.

After receiving inadequate and uneven rainfall in June 2024, the country’s monsoon picked up in July 2024 with rainfall at 109 per cent of LPA. The IMD expects the rainfall to be within the range of 94 to 106 per cent for August 2024.

With the development of La Nina conditions by the end of August 2024, IMD’s forecast for the entire monsoon rainfall in 2024 is projected at 104 per cent of LPA, aided by a surplus of 2 per cent during June and July 2024.

However, the spatial distribution of rainfall still remains a concern as during June and July 2024, the South Peninsula received rainfall at 127 per cent of LPA and Central India recorded rainfall at 117 per cent of LPA. On the other hand, the East, Northeast and Northwest regions received rainfall at a deficiency of 18 to 19 per cent during the same period.