Favorable Monsoon & Increased Crop Prices to Help Agri GVA Grow By 4% in FY23: Ramesh Chand

If the monsoon returns to normal, as anticipated by the weather bureau, and owing to high commodity prices, India may expect another solid year of agriculture growth of at least 3% this fiscal year.

"A normal monsoon is unquestionably beneficial to agriculture. There are three factors to consider: rainfall amount, geographical dispersion, and timing. The quantity aspect is now expected to be normal. So we should expect regular agricultural growth as well," Ramesh Chand, a member of the Niti Aayog, told BusinessLine.

"Last couple of years, we have been seeing above 3% growth," he remarked when asked if the country could accomplish its aim of 4% growth in the farm sector gross value added (GVA). Agricultural produce prices are now high, which is a favourable driver for growth. When these two elements are combined, we may expect 4% growth. Otherwise, it may be between 3 and 3.25 percent."

Experts say it's unusual to see the farm sector expand at the same rate when the base is already strong, with more than 3.5 percent growth in each of the previous three years.

'Normal Rainfall For The Fourth Year In a Row'

"This will be the fourth year in a row with normal rainfall." If the distribution across the nation during each month of the season follows the regular pattern we've seen in the past, the agriculture sector's GVA increase might be 3-3.5 percent, according to DK Pant, Chief Economist, India Ratings and Research, a Fitch group firm.

Due to the Russia-Ukraine conflict, commodity prices such as wheat and a few others are already high, and the nominal GVA is anticipated to rise by 7-8%, he added. However, if prices continue to rise, this growth might reach 8%, according to Pant.

Concerns about rising commodity prices have been addressed by Chand, who stated that agri commodity prices are approaching a new equilibrium. "When fertiliser and diesel prices are rising, you cannot expect agriculture prices not to climb," he remarked.

According to an IMD estimate made on April 14, India would get regular rainfall, accounting for 75% of the country's annual rainfall of 116 cm and roughly 99 percent of the long-period average (LPA) of 87 cm during the June-September monsoon season.