Farm growth at 5-year high, to help lower demand for guaranteed rural jobs

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₹86,000 crore for the state-fun rural job scheme, the same as the revised estimates for FY24. “Monsoon is a major factor, which influences output of agriculture much more strongly for the crop sector. So, the monsoon forecast that we will have La Nina effect and rainfall will be 2% above normal is very good news for Indian agriculture.

This news came when we have low growth. Production of a few commodities, including oilseeds, rice, sugar and wheat, came down last year (2023-24) due to erratic monsoon and patchy winter rains and a long dry spell," Chand told Mint. Farm output in FY24 is estimated to have grown by a mere 0.7%, compared with an upwardly revised 4.7% growth in FY23, as per the statistics ministry’s second advance estimates. “Taking the base effect impact and the positive effect of monsoon into consideration, past trend and past pattern suggest that we can expect more than 6% growth in agriculture this year," Chand said.

After El Niño caused insufficient rainfall. leading to water scarcity in some regions, besides droughts and prolonged dry periods across Asia, the India Meteorological Department earlier this week forecast above-normal monsoon rainfall at 106% of the long-period average (87 cm) this year. The El Nino weather phenomenon turning neutral and benign La Nina conditions setting in by August-September signals relief across sectors, especially in agriculture.

In FY24, agriculture and allied sectors’ GVA growth was 0.7% after it contracted 0.8% in the October-December quarter – for the first time in 19 quarters. GVA growth was 1.6% in the previous quarter, and 4.7% in FY23. In FY17, FY18 and FY20, the sector recorded growth rates of 6.8%, 6.6% and 6.2%, respectively.