Global analytical company CRISIL has released a report which states that India’s agricultural growth during this financial year could be around 1.5 percent. This is marginally better from the country’s agricultural growth of 0.2% in 2014-15.
Southwest Monsoon ended at 86 per cent of the LPA on September 30 this year. This was the second consecutive season with deficient rainfall and has been termed as a mild meteorological drought. Thus, there were concerns regarding the overall agricultural growth of the country, due to a not so fulfilling Monsoon season.
Agriculture GDP consists of food grains and horticulture, forestry, logging, livestock, aquaculture and fishing. The livestock sector and aquaculture and fishing are two sectors which are expected to stick to their growth rate of around 50 to 5.5 percent despite weak Monsoon.
The report does state that foodgrains production this year could be lower as compared to estimates suggested earlier, but the remaining categories will make up for it.
Rural areas are responsible for nearly half of India’s GDP and consecutive bad Monsoons lead to fall in farm income. With 40 per cent Indian households engaged in agriculture, a weak Monsoon only adds to the woes, in particular for the two-thirds that are heavily reliant on agriculture.
To sum it up, despite a not so impressive Monsoon performance this year, agriculture growth is not likely to get hampered. Horticulture and Livestock are going to bring in some much-needed support to the agriculture GDP thereby somewhat negating the effects of a bad Monsoon.
(CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. It is India's leading ratings agency.)
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