Normal monsoon, higher crops prices may help agri GVA to grow 4% in FY23: Niti Aayog Member
India can expect another good year of agriculture growth of at least 3 per cent this fiscal, if the monsoon becomes normal as predicted by the weather bureau and due to high prices of commodities.
“Normal monsoon is definitely good news for agriculture. However, there are three aspects — quantity of rainfall, geographical distribution and timing. As of now, the quantity aspect is predicted to be normal. So, we can expect normal agriculture growth too,” Niti Aayog Member Ramesh Chand told BusinessLine.
Asked if the country could achieve its targetted 4 per cent growth in the farm sector gross value added (GVA), he said, “Last couple of years, we have been seeing over 3 per cent growth. Prices of agricultural produce are high (now) which is a positive factor for growth. These two factors combine, can get us 4 per cent growth. Otherwise, it may be 3-3.25 per cent.”
It is very rare to see when the base is already strong, with more than 3.5 per cent growth each in the last three years, and still, the farm sector records the same growth rate, said, experts.
‘Fourth consecutive year of normal rainfall’
“It will be the fourth consecutive year of normal rainfall. If the distribution across the country during each month of the season is closer to the normal pattern we have observed in the past, then the GVA growth in the farm sector could be 3-3.5 per cent,” said DK Pant, Chief Economist, India Ratings and Research, a Fitch group company.
Already prices of commodities like wheat and a few others are high due to the Russia-Ukraine war, and it is expected that the nominal GVA will grow by 7-8 per cent, he said. However, if prices further move up, this growth may exceed 8 per cent, Pant said.
On the concerns about high commodity prices, Chand said that the agri commodities’ prices are moving to a new equilibrium. For some months, there will be inflation and after that, it will subside, he said, adding, “When fertiliser, diesel prices are rising, you cannot expect agriculture prices not to rise.”
According to the IMD forecast released on April 14, India will receive normal rainfall, quantitatively 99 per cent of the long-period average (LPA) of 87 cm during the June-September monsoon season, accounting for 75 per cent of the country’s annual rainfall of 116 cm.
Private weather forecaster Skymet has also predicted a normal monsoon this year at 98 per cent of LPA. Rainfall between 96 per cent and 104 per cent of LPA is considered ‘normal’ as per meteorological terms. The country last time in 2018 had received below-normal monsoon rainfall at 91 per cent of LPA.
April 17, 2022