Agricultural Growth Moderates Amidst Mixed Sowing Patterns

The agricultural Gross Value Added (GVA) growth is projected to moderate to 4.5% in the first quarter of FY26, a slight decrease from the previous quarter's 5.4%, as per ICRA's latest report. This deceleration is attributed to varied sowing patterns across key crops, though the sector's outlook remains broadly positive.

Impact on Rural Incomes and Economic Momentum

A slowdown in Agri-GVA expansion could affect rural incomes and consumption, with broader implications for the economy. However, steady outputs from rabi and most summer crops continue to bolster the farm sector.

Annual Projections and Crop-Specific Trends

For FY26, ICRA anticipates agricultural GVA growth to ease to between 3.5% and 4.0%, down from FY25's provisional 4.6%. The forecast hinges on a healthy Kharif season. Notably, moong, rice, and maize sowing has seen healthy growth, whereas arhar, urad, and soybean lag behind last year's levels.

Rainfall: A Decisive Factor for Crop Output

The India Meteorological Department predicts above-normal rainfall for August–September 2025, with neutral El Nino conditions expected to aid sowing. However, rainfall distribution remains a critical variable. July 2025 saw 105% of the long-period average rainfall, slightly below forecasts, with a notable decline in the latter half of the month.