Consistent performer: Despite high base, agri sector clocks growth

While all other sectors showed a surge due to the base effect, agriculture and allied activities did not have any such concern and the sector maintained its consistently good performance in the first quarter of FY22, clocking a growth rate of 4.5 per cent against 3.5 per cent during the same period last fiscal year.

Growth at current prices in Q1 of FY22 was also impressive at 11.1 per cent as against 5.6 per cent during the same period last fiscal year, thus translating into an inflation impact of 5.5 per cent. However, experts and market watchers have concern over final kharif output because the southwest monsoon continues to remain erratic over large parts of Central and Western India despite the recent revival in the rains.

Rain in August this year was 24.1 per cent less than the normal. The month according to some experts was the sixth driest since 1901 and the third driest in this century, after 2005 and 2009.

August and July are the two most important months in the four-month southwest monsoon season and any drop in rain in those could have a debilitating impact on final crop output. The data of the India Meteorological Department showed in August this year almost all parts of India except the East and Northeast, received less than normal rain.

Central and North-West India suffered the most, with 39.2 per cent and 30.6 per cent less than normal rain.

“Agriculture has been the shining star once again with the rabi crop adding to this growth of 4.5 per cent over 3.5 per cent last year. The kharif prospects would be critical here and the monsoon and sowing pattern need to be tracked,” Madan Sabnavis, chief economist at CARE Ratings, said in a statement.

As the first-quarter gross value added estimates are based on the agriculture production targets of 2021-22 as provided by the Department of Agriculture, the numbers are bound for revision in the coming quarters when the estimates come. The latest sowing numbers show that uneven rain has impacted sowing.

Till August 27, kharif crops have been sown in 106.40 million hectares of land, which is 1.75 percent less than the area covered during the same period last year. Another parameter being watched is the water levels in 130-odd reservoirs.

The data shows that till last week water levels in all of them have dropped below last year's level except those in southern India.

This could have serious repercussions, particularly in the coming rabi sowing season. It could also hurt the irrigation and power generation potential of several of them.