Gross Value Added (GVA) in agriculture and allied activities is projected to have grown by 3 per cent in FY26, slightly more than the 2.4 per cent estimated in the Second Advance Estimates due to the good performance of rabi crops, but significantly lower than 4.2 per cent in FY25, the provisional estimates released on Friday showed.
The drop in GVA in FY26 is largely on account of a steep decline in GVA for the sector at current prices.
At current prices, GVA for agriculture and allied activities dropped from 9.2 per cent in FY25 to just 1.4 per cent in FY26 due to low inflation.
The decline in current prices has been due to negative inflation, which could have an impact on farmers’ earnings at the broad level.
The data also showed that in the fourth quarter of FY26, GDP growth at constant prices for agriculture and allied sectors was projected at 3.6 per cent, up from 1.7 per cent in the third quarter, while at current prices, it rose to 2.8 per cent from a negative 0.5 per cent in the third quarter.
“In the Second Advance Estimates released on February 27, GVA for agriculture and allied activities was pegged at 2.4 per cent, but in the provisional estimates it has been revised upwards to 3 per cent, which means the impact of the rabi harvest has been taken into account in the FY26 numbers,” Madan Sabnavis, chief economist, Bank of Baroda, said.
However, going forward, agriculture growth in FY27 and its first quarter could come under pressure if farm production falters significantly due to the adverse impact of an El Niño monsoon.
Though the south-west monsoon arrived after a delay of three days over Kerala on June 4, many experts said its progress and spread over the next four months of the monsoon season could come under strain due to the impact of El Niño. The India Meteorological Department (IMD) has lowered the forecast for the 2026 monsoon to 90 per cent of the Long Period Average (LPA), down from 92 per cent predicted in April, due to El Niño. If the actual rainfall is close to the forecast, it would mean that the 2026 south-west monsoon could be the driest in more than a decade.
Meanwhile, India’s foodgrains production in the 2025-26 crop year (July to June) is projected to increase to 376.55 million tonnes from 357.73 million tonnes in the previous year, the latest data showed.
