Growth in farm sector pegged at 3.5% in FY23: First advance estimates

At current prices, growth estimated at 12.5%, which is among the best in recent times

The gross value added (GVA) in agriculture and allied activities is expected to grow by 3.5 per cent in constant price terms in financial year 2022-23 (FY23), which is close to its long-term growth trend.

According to the first advance estimate of national income for FY23 released on Friday, the growth in GVA in FY22 was estimated at 3 per cent at constant prices. In current price terms, the FY23 GVA growth was projected at a sharp 12.50 per cent, among the best in recent times. This translates to an inflationary impact of 9 per cent, which too is among the highest in recent times.

In comparison, during the corresponding period of last year growth at current prices was estimated at 10.30 per cent.

The sharp increase in GVA in agriculture and allied activities in current prices in FY23 was largely because of the rise in prices of almost all major agricultural commodities, but most importantly in cereals such as wheat and rice.

Growth of 3.5 per cent at constant prices in FY23 raises hopes that the government does not expect any adverse impact on agricultural production this financial year, unlike last year, when growth was affected by a drop in wheat output.

 “There are no major surprises in the agriculture and allied activities GVA projections for FY23 and it is mostly on expected lines of 3-4 per cent growth in constant prices. The high growth in current prices is mainly due to inflation in cereals,” Madan Sabnavis, chief economist at Bank of Baroda, told Business Standard.

According to the first advance estimate of kharif production for the 2022-23 (July-June) season, rice output is expected to be almost 6.05 per cent lower than the corresponding period last year at 104.99 million tonnes (MT).

This is because of drought-like conditions in the main growing regions of Uttar Pradesh, Bihar, Jharkhand, and West Bengal.

Among other kharif crops, the production of pulses was projected at 8.37 MT — the same as last year.

Oilseeds output was estimated at 23.57 MT, a decline of 1.29 per cent from 23.88 MT last year. Sugarcane production was projected at 465.04 MT, 7.69 per cent more than the 431.81 MT recorded last year.

In the ongoing rabi season, crops were sown in around 66.58 million hectares till Friday, which was 1.9 million hectares more than last year.