Agriculture, forestry and fishery sectors would witness a substantially lower growth of 3-3.2 per cent in the current financial compared with 6.3 per cent registered in 2017-18 on account of below-par monsoon, credit rating agency ICRA said on Monday.
According to the India Meteorological Department data, rainfall received during the four-month-long southwest monsoon season was 91 per cent of long-period average of 88 cm, and this “undershot” the lower bound of IMD’s first and second stage forecasts, it said in a statement.
Despite this, ICRA said it expects bolstering of rural consumption posing fiscal and inflationary risks, because of programmes initiated by the government for doubling farmers’ income, hike in minimum support price for various crops and crop loan waivers announced by some state governments.
There has been a rainfall deficit throughout the season in most parts of the country, barring some areas that experienced severe flooding such as Kerala in August and Nagaland in September. It worsened further in September.
“In line with the uneven monsoon spread and progress, the area sown under kharif crops stood at 105.2 million hectares (mha), 1.9 per cent lower than 107.3 mha in 2017-18,” ICRA said.
According to this data, kharif sowing lagged the year-ago levels for coarse cereals (-5.9 per cent), pulses (-3.8 per cent), rice (-2.4 per cent) and cotton (-1.5 per cent), whereas the same for sugarcane and oilseeds posted a YoY increase of 9 per cent and 1.6 per cent, respectively.
Despite the drop in kharif acreage, most crops are expected to yield a better kharif output, according to the first advance estimates of production. Oilseeds output is expected to be 5.7 per cent higher than last year, sugarcane 1.9 per cent and rice 1.8 per cent compared to the fourth advance estimates for 2017-18.
In contrast, kharif output is estimated to contract for cotton (-6.9 per cent), coarse cereals (-2.2 per cent) and pulses 9-1.3 per cent). The prospects, however, are looking up for rabi season with the reservoir storage on a pan-India basis standing at a healthy 76 per cent of the full reservoir level during last week of September, against 66 per cent during the corresponding period last year.